PETROVIETNAM TRANSPORTATION CORPORATION

PVTrans is providing crude oil & gas products transportation and other maritime services. It dominates market share for crude oil and LPG transportation in domestic market. Based on the subject’s annual report 2023, 85% of PVTrans's fleet is operated in international markets. The company’s shares (stock symbol “PVT”) were listed on HOSE on 10 Dec 2007.
From the beginning of 2023, the maritime transport market continuously fluctuated, recording a strong differentiation between transport segments. Domestically, the economy gradually recovered, leading to an increase in demand for petroleum consumption to serve production and business activities and transportation, creating favorable conditions for PVTrans's production and business activities. In 2023, the company purchased and leased a total of 12 ships, increasing the size of its owned and managed fleet to 51 ships with a total tonnage of nearly DWT 1.4 million, an increase of 37% compared to the beginning of that year. Of the 12 new ships added in 2023, up to 6 are chemical ships. As investigated, this fleet expansion has shown that PVTrans is pivoting from carrying finished petroleum products to the chemical segment. PV Trans’s representative said that the chemical transportation market has stable freight prices, fewer market fluctuations, and gross profit margin is significantly better than the finished petroleum segment; meanwhile, the demand is high and the supply of ships for this segment in the region is quite small. PV Trans's strategy in the coming years is to gradually narrow the fleet of finished petroleum tankers and promote chemical tankers with the goal of owning about 37 chemical ships by 2025.
In 2024, PVTrans has a plan to spend VND 3,374 billion on business development investment activities. Of which, VND 3,102 billion is expected to be spent on capital construction investment. PV Trans will have 02 projects carried over from last year with a total investment capital of USD 80 million (equivalent to VND 1,880 billion) for investing in 01 VLGC ship (CBM 72,000 - 85,000) or 01 Aframax ship (DWT 80,000 - 120,000) or 02 MR ships (DWT 45,000 - 55,000) with a maximum value of USD 58 million, and invest in 01 chemical oil ship (DWT 10,000 - 25,000) or 01 bulk cargo ship (DWT 25,000 - 75,000) with a maximum value of USD 22 million. At the same time, PVTrans also started a new project with the expected spending of a maximum of USD 52 million (equivalent to VND 1,281 billion) to invest in 02 MR vessels (DWT 45,000 - 55,000) or 01 Aframax vessel (DWT 80,000 - 120,000). In addition, the company plans to spend VND 262 billion to invest and contribute capital to 03 companies including Phuong Dong Viet Shipping and Logistics Corporation, Thang Long Maritime Joint Stock Company, and Indochina Petroleum Transportation Joint Stock Company. If PV Trans's investment plan to expand its fleet in 2024 is successfully implemented, the total fleet capacity by the end of 2024 is estimated to increase by 40% compared to 2023. The company's Board of Directors has just approved the 2024 production and business plan with a revenue target of VND 8,800 billion and a net profit target of VND 760 billion, down by 7% and 39% respectively compared to 2023.
In 2024, the growth support factor for the shipping industry will once again come from geopolitical tensions. Current geopolitical tensions (Russia-Ukraine war, Israel-Hamas-Hezbollah conflict in the Middle East, recent Houthi shipping attacks in the Red Sea...) will be a supporting factor for the industry, especially for maritime transport because conflicts cause sea routes to take longer, reducing supply and supporting the transportation of goods. It is forecasted that ship freight prices will continue to be high because the global supply of oil tankers and fuel could not increase in the next 1-2 years while demand remains stable. Thanks to the re-signing of contracts with high freight rates, the profit margin of PV Trans's crude oil, product oil/chemical transportation segment in 2024 is expected to remain at a high level of 22% - 29.5%.