Vietnam seaports face risks despite gradual recovery this year
Despite the gradual recovery of the seaport industry, there are still several potential risks to consider in 2024.
Cai Lan Port Investment Joint Stock Co (CPI), the first seaport enterprise to release financial statements for the third quarter of 2023 (3Q23), reported revenue of 23 billion dong in the first nine months of 2023, a 49% decrease compared to the same period last year.
It also incurred a after-tax loss of nearly 1.7 billion dong, whereas it had a profit of 5.5 billion dong in the same period the year before. By the end of 3Q, CPI’s accumulated losses exceeded 404 billion dong.
Cam Ranh Port Joint Stock Co (CCR), accumulated nearly 101 billion dong in revenue and 10.5 billion dong in profit after tax during the first nine months, representing a 9.2% and 5% decline, respectively, compared to the same period the year before.
Gemadept Joint Stock Co (GMD) recorded net revenue of 998 billion in 3Q, showing minimal change from the same period a year ago. Its net profit for the quarter reached 254 billion dong, a 4% increase from the same period a year ago.
Cumulatively for the first nine months, GMD achieved net revenue of 2.8 trillion dong, equivalent to the same period a year ago.
However, its net profit reached 2.1 trillion dong, a remarkable 161% increase year-on-year (y-o-y), primarily due to a one-off profit of more than 1.8 trillion dong from the transfer of its entire 84.6% capital at Nam Hai Dinh Vu Port in the second quarter.
As a result, GMD achieved 72% of its revenue forecast and surpassed its yearly profit target by 154% after nine months.
Vietnam Container Corp Joint Stock Co (VSC) experienced a 9.8% increase in consolidated revenue, reaching 557 billion dong in 3Q23. However, its consolidated profit after tax decreased by more than 50% to 50.1 billion dong.
For the first nine months of 2023, VSC achieved revenue of 1.5 trillion dong, a 4.5% increase, but its profit after tax declined by 60.6% y-o-y to 127.2 billion dong.
Mirae Asset Vietnam Securities Co (MASVN) had forecast that VSC’s revenue would reach two trillion dong in 2023, with an estimated profit after tax of 152 billion dong.
In 2024, due to the merger with Nam Hai Dinh Vu, VSC’s revenue is expected to reach 2.41 trillion dong, an 18.4% rise y-o-y, and its profit after tax is estimated to reach 213 billion dong, a more than 40% 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 Vietnam’s major export markets weakened by the end of September, although it remained higher than at the beginning of 2023.
Additionally, while real spending growth in the United States remains positive, the momentum appears to be slowing down. Factors such as geopolitics, uncertainty over interest rates, a slowdown in the Chinese economy, and short-term excess seaport capacity pose risks in 2024.
In an updated outlook report for the seaport industry, Yuanta Vietnam Securities Co stated that several factors support a recovery in transport and charter rates starting from the end of 2023.
Freight rates are currently low compared to 2021-2022 and are unlikely to decrease further.
Moreover, global demand for goods transport is expected to increase as the economy recovers and inflation cools down.
Viet Nam News – January 5, 2024