Vietnam seafood majors report Q1 profit plunge as exports decline
Vinh Hoan and Nam Viet reported a sharp profit drop in the first quarter of this year, while Minh Phu posted a first loss in seven years as Vietnam's seafood exports decreased compared to the same period last year.
Vinh Hoan Corporation, Vietnam's leading pangasius fish exporter, recorded an after-tax profit of VND225.7 billion ($9.6 million) in Q1, down 59% year-on-year. The company's net revenue reached VND2.22 trillion ($94.5 million), down 32%, according to its Q1 consolidated financial statement.
As of the end of March, Vinh Hoan's total assets had stood at VND11.67 trillion ($496.52 million), of which short-term assets accounted for 66%. Inventories increased by 18% to VND3.32 trillion ($141.14 million).
On the Ho Chi Minh Stock Exchange (HoSE), VHC stood at VND57,500 ($2.45) per share at the closing session on Friday.
Another leading pangasius exporter, Nam Viet Corporation (Navico), reported a net revenue of VND1.16 trillion ($49.2 million), down 5% year-on-year as both prices and sales decreased.
On the other hand, the price of feed ingredients and raw fish increased, causing the cost of goods sold to increase by 10% to VND951 billion ($40.5 million), making its after-tax profit hit VND92 billion ($3.92 million), down 55%.
As of March 31, 2023, Nam Viet's assets had been VND5.71 trillion ($243.43 million), up 4% compared to the beginning of the year. Of which, inventory was VND2.67 trillion ($113.6 million), up 14%.
On the HoSE, the ANV share price stood at VND31,900 ($1.36) per unit at Friday's close.
Meanwhile, Minh Phu Seafood Corporation, Vietnam’s leading shrimp exporter, reported an after-tax loss of VND95 billion ($4.05 million) in Q1, the first loss since the beginning of 2017.
The company (MPC) recorded net revenue of VND2.12 trillion ($90.5 million) in the period, halved compared to the same period last year and the lowest revenue since the beginning of 2020.
In the same period last year, it recorded an after-tax profit of VND100 billion ($4.26 million).
As of March 31, 2023, Minh Phu's assets had reached VND9.5 trillion ($405.2 million), down 10% compared to the beginning of the year. Of which, short-term assets were VND6.4 trillion ($273 million), accounting for 67%. Inventories hit VND4.74 trillion ($202.2 million).
Liabilities decreased by VND1 trillion compared to the beginning of the year to VND3.83 trillion ($163.33 million).
Minh Phu has been Vietnam’s largest shrimp producer and exporter for several years. Based in the Mekong Delta’s Ca Mau province, the company has in recent years focused investments on upgrading shrimp farming technology. Its main export markets are the U.S., EU, Australia, New Zealand, Japan and Canada.
On the unlisted public company market UPCoM, the MPC price hit VND17,300 ($0.74) per share on Friday.
In the first four months of 2023, Vietnam's seafood export turnover reached $2.6 billion, down 30% year-on-year, according to Ministry of Agriculture and Rural Development data.
The largest contribution to seafood import and export turnover are items like shrimp, pangasius and tuna with export value reaching $887 million, $570 million and $248 million, down 37%, down 41% and down 33% year-on-year, respectively.
Notably, the U.S., Vietnam's largest seafood export market, saw a more than 50% decline, which made the U.S. fall to the third position among seafood import markets, after Japan and China. Large inventories and high inflation in the U.S. greatly affected consumer consumption in the first period of 2023.
Meanwhile, exports to China, despite having better signals, have not yet recorded a positive growth compared to the same period in 2022 as pangasius exports to this market have not recovered because the average export price has decreased.
In the context of reduced consumption, top broker SSI Securities said it believes that pangasius sales will be less affected than shrimp.
Although more time is needed to assess the quantitative impact of China's reopening on pangasius exports, SSI Research believes that it will benefit the industry's revenue as China is Vietnam's largest pangasius export market.
However, China is a price-sensitive market and the average selling price to this market is always about 40% lower than the average price to the U.S.
The broker predicts the gross profit margin of the seafood industry will decrease in 2023. With interest rates expected to remain high throughout the year, rising financing costs will continue to weigh on net margins, especially for highly leveraged companies.
Meanwhile, KB Securities still sees a number of positive factors that can support the seafood industry in 2023, including China, Vietnam's largest seafood export market, opening its economy after giving up its "Zero-Covid" policy, helping to significantly increase demand at restaurants and hotels.
However, Vietnamese pangasius still has to compete fiercely with tilapia in China, so KB Securities believes that the reopening will only reduce growth pressure and not create a boom in this market.
Besides, reduced freight rates are helping businesses to reduce the burden of logistics costs, offsetting profit margins when they have to reduce selling prices. Seafood exporters to the U.S. market like Vinh Hoan may also benefit if the U.S. dollar increases in price.
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