Shipping firms report disappointing third-quarter business results

The lacklustre corporate profits can be attributed, in part, to the recovery of exports and imports in the third quarter of this year, which although improved, still declined in comparison to the same period last year.

Vietnam Sea Shipping Joint Stock Company (VOS) recently disclosed its business results with a substantial loss, reflecting the challenging conditions prevailing in the shipping market.

In the third quarter, VOS's net revenue experienced a slight increase of nearly VND8 billion (nearly US$322,000) compared to the same period last year, reaching VND710 billion (US$29.4 million).

However, despite the revenue growth, the surge in the cost of goods, which rose by nearly 160% to VND715 billion, resulted in VOS incurring a loss of nearly VND25 billion. This is in stark contrast to the profit of nearly VND152 billion recorded during the same period last year. Consequently, this marks the first quarter where the company reported a loss since the second quarter of 2021.

In the first nine months of 2023, VOS's accumulated profit stood at approximately VND48 billion, a significant decline of nearly 10 times compared to the same period last year.

Cai Lan Port Investment Joint Stock Company (CPI) faced a decline in net revenue, reaching only 8 billion VND, down by 46% compared to the same period last year. The company's gross profit plummeted by 91% during this period, amounting to slightly over VND250 million. Additionally, financial revenue experienced a sharp decrease of 92% to VND3 billion, while business management costs rose by over VND1.2 billion. Consequently, Cai Lan Port reported an after-tax loss of VND770 million in the third quarter of 2023, compared to a profit of nearly VND3 billion in the same period last year.

In the first nine months, Cai Lan Port's revenue amounted to VND23 billion, down by 49% compared to the same period last year. The company incurred an after-tax loss of nearly VND1.7 billion during this period, while it had a profit of VND5.5 billion in the corresponding period last year. As of the end of the third quarter, Cai Lan Port's accumulated loss exceeded VND404 billion.

Similarly, Phuoc An Port Investment and Exploitation Petroleum Joint Stock Company (PAP) also reported a loss in the third quarter. With no recorded revenue during this period, the company solely incurred business management costs, resulting in an after-tax loss of nearly VND1.7 billion. In comparison, it incurred a loss of VND4.6 billion during the same period last year.

In the first nine months of 2023, Phước An Port recorded a loss of nearly VND5 billion, whereas it reported a loss of VND6 billion in the corresponding period last year.

Despite a decrease in net revenue, certain businesses have managed to achieve profit growth by capitalising on revenue from other sources.

Can Tho Port Joint Stock Company (CCT) experienced a net revenue decline of over 4% in the same period, amounting to VND34 billion. Simultaneously, the cost price rose by nearly 9% to over VND28 billion, resulting in a 31% decrease in gross profit to VND6 billion. Net profit from business activities also declined by more than half in the same period, reaching VND675 million.

However, with the inclusion of income from the liquidation of fixed assets and after deducting expenses, the company reported a profit after tax of VND3.3 billion, nearly 2.5 times higher than the same period last year.

In the accumulated nine months, Can Tho Port's revenue reached VND108 billion, reflecting a 14% increase compared to the same period last year, and the profit after tax surged by 20 times to VND4.5 billion.

Among the various reasons hindering positive profits in the shipping industry, a significant factor is the decline in import and export activities compared to the same period last year, despite a recovery taking place.

According to the General Department of Customs, export turnover in the third quarter of 2023 is estimated to reach US$94.6 billion, displaying a 10.3% increase compared to the second quarter of 2023. However, it still represents a 1.2% decline compared to the same period last year. Import turnover is estimated at US$86 billion, which is a 4.5% decrease compared to the same period last year but an 11% increase compared to the second quarter of 2023.

Significantly, after four consecutive months of growth, exports exhibited signs of decline in September, dropping by 4.1% compared to August.

Freight prices are currently rebounding, according to Yuanta Vietnam Securities Limited Company (YSVN).

Analysts also assert that the shipping, seaports and logistics sectors are poised to benefit from the recently upgraded comprehensive strategic partnership between Vietnam and the US.

The US remains Vietnam’s largest export market, with turnover to the US increasing by 13.6% in 2022. In the first nine months of 2023, Vietnam recorded a trade surplus of US$60.7 billion with the US.

Mirae Asset Securities Joint Stock Company (Vietnam) predicts that Vietnam’s seaport and logistics industry will be among the sectors that benefit the most from the improved Vietnam - US relations, considering the US as the largest consumer of Vietnamese goods.