Shipping major PVTrans stock scales new peaks

Shipping firm PVTrans, a subsidiary of state-owned Petrovietnam, has seen its stock, PVT, surge nearly 34% since mid-April from VND24,200 to VND32,400 ($1.27), a record high.

The ticker has been climbing steadily since the end of November 2022, when it had hit VND14,000 ($0.55) per share.

PVTrans is a leading provider of liquid cargo transportation and oil and gas maritime services. Petrovietnam has a 51% stake in the firm which accounts for 100% of the domestic crude oil and LPG shipping market share and has robust international market operations

Its stock has increased in the context of continuously growing business results over the last three years (2021-2023). In 2023 alone, the company reported pre-tax and net profits of VND1,222 billion ($48.07 million) and VND972 billion ($38.23 million), up 5.6% and 13.4% year-on-year, respectively.

2023 proved favorable for the corporation despite being a difficult year for many industries after a surge in demand for gasoline consumption and transportation.

The outlook for the oil shipping industry was influenced by prolonged shipping times and high prices as a result of the Russia-Ukraine conflict. In October 2023, Israel-Palestine tensions and raids on cargo ships in the Red Sea made the situation even more difficult.

PVTrans also increased its fleet to 51 with a combined tonnage of 1.4 million tons after investing in 12 new ships last year. This expanded to the corporation's total capacity by 37%, helping increase business efficiency.

In the first quarter of this year, PVTrans continued to record positive business results, with revenue increasing 24% year-on-year to VND2,536 billion ($99.75 million) and after-tax profit going up 27.5% to VND306 billion ($12.04 million), fulfilling 29% and 40.2% of its annual profit targets, respectively.

Sharing the corporations' outlook for 2024, CEO Nguyen Duyen Hieu said that the liquid cargo and LPG shipping market will maintain a positive trend, generally. Bulk cargo shipping was expected to recover thanks to balanced supply and demand this year, based on stable output for export in the Atlantic region, but the situation was unlikely to return to the record levels of 2021-2022, he said.

However, the firm has set cautious business goals, with consolidated revenues of VND8.8 trillion ($346.15 million) and after-tax profit of VND760 billion ($29.9 million), down 8% and 38% year-on-year, respectively. It plans to spend VND3.1 trillion ($121.94 million) on ships and VND262 billion ($10.3 million) on capital contributions to member units.

In the long term, PVTrans plans to invest more in shipping chemicals instead of finished oil in 2024-2025 due to the expected transition from fossil energy use as well as the relatively stable market for this segment.

Broker BIDV Securities (BSC) has said that this investment activity will boost the corporation's medium and long-term prospects.