A glance at Vietnam’s shipping industry

In addition, businesses must also manage to adapt to the trend of reducing carbon emissions if they do not want to be eliminated from the game.

Profits of shipping businesses have declined

For the most part of 2023, businesses in Vietnam's shipping industry faced unpredictable market developments. Many large ships have had to cut routes and route structures.

"In 2023, due to the economic recession, rising fuel prices and inflation, shipping demand decreased sharply in many large consumer markets, partly because of reduced purchasing power due to inflation and slow economic recovery while freight rates were falling sharply" Deputy Director Hoang Hong Giang pointed out at the 2023 work summary conference of the Vietnam Maritime Administration.

Financial reports of shipping enterprises show that in 2023 their net profit dropped sharply compared to the peak in 2022.

For example, Hai An Transport and Stevedoring Joint Stock Company (Code: HAH) - the owner of the largest container fleet in Vietnam, reported that 2023's net profit decreased by 53% compared to 2022 to VND 385 billion. In the fourth quarter of 2023 alone, its net profit decreased by 63% to VND 63 billion, the lowest since the first quarter of 2021.

Similarly, Vietnam Shipping Joint Stock Company (Vosco) also experienced a drop of 68% in net profit to VND 155 billion, the lowest in the past 3 years.

Specializing in bulk cargo, Vinaship Shipping Joint Stock Company (Code: VNA) also announced a decrease in net profit of up to 85% to VND 36 billion which is the lowest since 2021.

Business results of seaport businesses

Meanwhile, the performance of seaport businesses is somewhat better as the volume of goods through the seaport in 2023 still increased by 5%.

In general, the 2023 net profit of seaport companies in the Central and Southern regions increased, while those in the North decreased slightly or remained flat.

Da Nang Port (Code: CDN) last year saw record high revenue and profit after tax of VND 1,236 billion and VND 275 billion, respectively, an increase of 3% and 1% respectively compared to 2022.

Quy Nhon Port (Code: QNP), Dong Nai Port (Code: PDN), Saigon Port (Code: SGP), Cat Lai Port (Code: CLL) also reported two- to three-digit growth in net profit for the year. Only Cam Ranh Port (Code: CCR) had almost flat results.

For Gemadept (Code: GMD), last year the company’s net profit was VND 2,221 billion, nearly 2.2 times higher than in 2022 and the highest in its operating history thanks to profits from the divestment deal of Nam Hai Dinh Vu Port ( end of May 2023). Net revenue last year decreased only 1%, with 76% coming from port operations.

Vietnam Container Joint Stock Company (Viconship – Code: VSC) had a heavy interest burden from the acquisition of Nam Hai Dinh Vu Port (interest costs from VND 1 billion in the same period to 170 billion in 2023), bringing net profit to VND126 billion, down 60% compared to the previous year and the lowest level since 2009.

Two major port enterprises in the Northern region, Hai Phong Port (Code: PHP) and Quang Ninh Port (Code: CQN), both recorded a decrease in revenue and net profit.

Source: vietnambiz

Compiled by VBI