Many shipping companies in Vietnam posted nine-month profit exceeding the whole year plan in the context of high transportation demand and freight rates.
Vietnam Maritime Corporation (VIMC), Vietnam's leading shipping firm, reported a pre-tax profit of VND2,770 billion ($111.4 million) in the first nine months of the year, up 30% year-on-year and exceeding 10% of the whole year plan.
VIMC leaders said that in the context of the shipping market experiencing many fluctuations, the company has made good use of market opportunities to sign high-value contracts for a number of dry cargo and oil vessels. VIMC is listed on the Unlisted Public Company Market (UpCOM) as MVN.
PetroVietnam Transports Corporation (PVTrans), a subsidiary of state-run Petrovietnam, recorded pre-tax profit of more than VND1,035 billion ($41.61 million) in the period, up 35% and exceeding 72% of the whole year plan.
According to PVTrans, listed on the HCMC Stock Exchange (HoSE) as PVT, the increase in freight rates in line with the price of raw materials has helped the revenue of transportation services increase significantly in Q3/2022.
In that context, some shipping lines benefited from the exploitation of new fleets and signed high-value contracts with foreign countries.
Meanwhile, Hai An Transport and Stevedoring Company Limited (HoSE: HAH) achieved an after-tax profit of VND861 billion ($34.62 million) in the first nine months, 1.5 times compared to the year plan.
Another big player in the shipping industry, Gemadept Corporation (HoSE: GMD), reported a profit before tax of VND1,057 billion ($42.5 million), up nearly 84% compared to the same period last year and completing 94% of the whole year plan.
Vietnam Ocean Shipping JSC (HoSE: VOS), recorded pre-tax profit of more than VND566.2 billion ($22.76 million) during the period, up 38%. Notably, this business has made up for all accumulated losses.
Vosco said that in the nine-month period, the shipping market was unpredictable, but in general, the freight level was maintained at a relatively good level. The company has signed contracts with high freight rates for a number of dry cargo ships. The container ship market also prospered over the same period, so both container ships operated more efficiently.
Similarly, Vinaship JSC (UpCOM: VNA) also had very positive results with pre-tax profit of VND273 billion ($10.98 million) in the nine months, nearly doubling over the same period in 2021.
Data from the General Statistics Office said that during January-September, sea freight transport reached more than 77.8 million tons, up about 27.5% year-on-year. Stable production activities continue to provide a great impetus for the recovery of shipping demand.
Top broker SSI Research forecasts that in the second half of 2022 and 2023, container shipping demand may slow down due to weak global consumption amid high inflation and the Ukraine war. In addition, the social distancing situation in China due to the Covid-19 pandemic also obstructed the circulation of goods and led to a decrease in the demand for goods transportation.
Besides, the current high freight rates will gradually adjust due to reduced demand and increased supply. The supply of newly-built container ships will increase sharply and enter the market (2023: 9.9%; 2024: 11.1% compared to the end of 2021), which will put pressure on freight rates.
Meanwhile, domestic freight rates would remain at their peak in 2023 as the market is still undersupplied with most of the Vietnamese fleet being leased to overseas markets with long-term contracts.
Fuel surcharges are also added to freight rates to reflect rising fuel prices, supporting carriers in the face of oil price fluctuations.
"Rental rates are likely to remain around the peak in the second half of 2022, then gradually decrease in 2023 as the supply of newly-built ships enters the market. However, the contract term may be shortened due to downside risk in the market," according to the SSI report.