Regarding the shipping industry as a whole, Tien Phong Securities Company believes that the outlook for 2024 will be more positive due to the gradual cooling down of global inflationary pressures and an increase in demand for goods transportation.

Profit disparities among businesses

Cái Lân Port Investment Joint Stock Company (CPI), the first seaport enterprise to release financial statements for the third quarter of 2023, reported revenue of VNĐ23 billion (US$945,000) in the first nine months, a 49 per cent decrease compared to the same period last year. They also incurred a post-tax loss of nearly VNĐ1.7 billion, whereas they had a profit of VNĐ5.5 billion in the same period last year. By the end of the third quarter, CPI’s accumulated loss exceeded VNĐ404 billion.

Cam Ranh Port Joint Stock Company (CCR), accumulated nearly VNĐ101 billion in revenue and VNĐ10.5 billion in profit after tax during the first nine months, representing a 9.2 per cent and 5 per cent decline, respectively, compared to the same period last year.

Gemadept Joint Stock Company (GMD) recorded net revenue of VNĐ998 billion in the third quarter, showing minimal change from the same period last year. Their net profit for the quarter reached VNĐ254 billion, a 4 per cent increase from the same period last year.

Cumulatively for the first nine months, GMD achieved net revenue of VNĐ2.8 trillion, equivalent to the same period last year. However, their net profit reached VNĐ2.1 trillion, a remarkable 161 per cent increase compared to the same period, primarily due to a sudden profit of more than VNĐ1.8 trillion from the transfer of their entire 84.6 per cent capital at Nam Hải Đình Vũ Port in the second quarter. As a result, GMD achieved 72 per cent of its revenue plan and surpassed its yearly profit target by 154 per cent after nine months.

Regarding business activities, Hải An Transport and Stevedoring Company (HAH) reported a revenue of VNĐ681.36 billion in the third quarter of 2023, a 12.5 per cent decrease from the same period last year. Their profit after tax for the quarter was VNĐ112.58 billion, a 59 per cent decline compared to the same period last year.

Accumulatively, HAH recorded a revenue of VNĐ1.9 trillion in the first nine months of 2023, representing a 17.5 per cent decrease from the same period last year. Their profit after tax for the same period was VNĐ318.7 billion, a 63 per cent decrease compared to the same period last year.

Việt Nam Container Corporation Joint Stock Company (VSC) experienced a 9.8 per cent increase in consolidated revenue, reaching VNĐ557 billion in the third quarter of 2023. However, their consolidated profit after tax decreased by more than 50 per cent to VNĐ50.1 billion. For the first nine months of 2023, VSC achieved a revenue of VNĐ1.5 trillion, a 4.5 per cent increase, but their profit after tax declined by 60.6 per cent compared to the same period last year to VNĐ127.2 billion.

Positive outlook, potential risks

Mirae Asset Vietnam Securities Company (MASVN) has forecast that VSC’s revenue would reach VNĐ2 trillion in 2023, with an estimated profit after tax of VNĐ152 billion. In 2024, due to the business merger with Nam Hải Đình Vũ, VSC’s revenue is expected to reach VNĐ2.41 trillion, an 18.4 per cent growth compared to the same period, and their profit after tax is estimated to reach VNĐ213 billion, a more than 40 per cent increase.

MASVN points out that while the seaport industry has shown signs of recovery, there are still potential risks in 2024. The consumer confidence index in Việt Nam’s major export markets weakened by the end of September, although it remained higher than at the beginning of the year. Additionally, while real spending growth in the US remains positive, the momentum appears to be slowing down. Factors such as geopolitics, uncertainties in interest rates, a slowdown in the Chinese economy, and short-term excess seaport capacity pose risks to demand in 2024.

In an updated outlook report for the seaport industry, Yuanta Việt Nam Securities Company states that several factors support transport and charter rates’ recovery starting from the end of 2023. Freight rates are currently low compared to the period of 2021-2022 and are unlikely to decrease further. Moreover, global demand for goods transportation is expected to increase as the economy recovers and inflation cools down. The supply of ships is not expected to increase significantly, and the trend of shifting production to Việt Nam will benefit the seaport industry.

According to an analysis report by Tiên Phong Securities Company (TPS), the significant increase in supply in the transportation market can be attributed to major shipping lines rushing to adopt greener fleets to comply with strict IMO regulations in the industry’s decarbonisation strategy. While this may worsen the oversupply situation, there are both positive and negative aspects to consider. On the positive side, the number of ships being decommissioned will increase, helping the market find a balance.

Regarding the shipping industry as a whole, TPS believes that the outlook for 2024 will be more positive due to the gradual cooling down of global inflationary pressures and an increase in demand for goods transportation.

“However, we anticipate that it will be challenging for freight rates in the domestic market to further increase, considering the expected continued upward trend in the number of container ships entering the market in 2024,” said TPS.

Viet Nam News