Two "big guys" in the plastic industry: The advantage of input has not created a spur for business in the first quarter

Binh Minh Plastics and Tien Phong Plastics - two big companies in the plastic industry both improved their gross profit margin in this quarter. Binh Minh Plastic still maintained its revenue growth momentum, but in return, sales discount expenses doubled in the same period.

Gross profit margin improved

Binh Minh Plastics Joint Stock Company (code BMP) and Tien Phong Plastic Joint Stock Company (code NTP) have just announced financial statements for the first quarter of 2020 with profit after tax both growing. Profit of Binh Minh Plastics this quarter increased by 12.4%, reaching VND 102 billion; and Tien Phong Plastic reported a net profit of nearly 76 billion dong, also growing by 5.6%.

The remarkable common point between the two businesses is that their gross profit margin has improved significantly. Mr. Chu Van Phuong - General Director of Tien Phong Plastic said that the decrease in input material prices over the same period is a factor affecting this business. The spread of the Covid-19 flu pandemic had an impact on the global economy, reducing oil consumption demand, leading to a sharp drop in oil prices in recent times. This factor is considered beneficial for the plastic industry in general.

However, revenue of Tien Phong Plastic decreased 4.2% over the same period, only 959.8 billion dong. The advantage of input factors helped the gross profit margin to increase from 31% to 32.3%, but the company's gross profit was also flat. Interest expense and selling expenses both decreased. Regular selling expenses, which account for more than 17% of Tien Phong Plastic's total revenue, have also decreased by more than 13 billion dong over the same period.