Saigon Port lowers target for 2016, plans divestment

VietinBank and VPBank bought a 9.07% stake and 7.44% stake, respectively, when the port underwent equitisation last year.

Although the regulations applied to the purchase included restrictions on transferring the port’s shares for at least five years, the buyers asked the board to permit sales in less than one year.

As of 2016, the port expects VND775 billion (US$34.7 million) in turnover and profit of VND50 billion. The target is much lower than last year’s recorded revenue of more than VND1 trillion and profit of VND85.5 billion.

This year, according to the port, it must relocate Nha Rong-Khanh Hoi Port under the city’s infrastructure plan by the end of December and must hand over part of the port by the middle of April. Thus, all services at the parent ports as well as their five subsidiaries will be affected, resulting in reduced output, revenue and profits. The port also said the Tan Thuan 1 and Tan Thuan 2 ports were restructured within the year, while construction work on Sai Gon-Hiep Phuoc Port was incomplete.

The port has been adjusted retroactively for after-tax profit calculations, with accumulated losses of more than VND1 trillion for 2015, as it failed to report losses of this amount from its associated companies, deep sea container terminal SP-PSA and SP-SSA International Terminal (SSIT), last year. As a result, the port owners’ equity fell by almost half.

So, due to these difficulties, the board must lower the current annual target and will not pay a dividend, in accordance with last year’s equitisation plan.

Also at the meeting, the port said it would sell its shares in Ngoc Vien Dong JSC, which is developing the Vinhomes Khanh Hoi project in Ho Chi Minh City.

Previously, the port was asked to contribute more capital to keep its current stake of 26% in the company when it raises the charter capital to VND5 trillion in the future.

Based in Ho Chi Minh City since 1860, the port has been a key transport hub for the country, connecting the city to the southern region, the Mekong Delta and the neighbouring country of Cambodia.

Saigon Port operates important ports in the southern part of Vietnam, including the Nha Rong Khanh Hoi, Tan Thuan 1, Tan Thuan 2 and Phu My Steel ports. The port accounts for 10.5% of the overall throughput in the South. Currently, the port has five subsidiaries offering logistics, commerce, transport and investment services in the city.

The board said it would concentrate this year on upgrading Tan Thuan 2 Port, establishing the Hiep Phuoc Service Zone in Nha Be district and cooperating with Khahomex Company to build an office building on Nguyen Tat Thanh Street in the inner city.