Vietnam's oil shipping major PVTrans to pay record high dividend

PetroVietnam Transportation Corporation (PVTrans), a subsidiary of state-owned Petrovietnam, will issue nearly 113.9 million shares to pay 2024 dividends, raising its charter capital to VND4,699 billion (over $180 million).

Per PVTrans's (HoSE:PVT) annoucement, June 20 will be the last registration date to make the list of shareholders for 2024 share dividend payment, at a rate of 32% - its all-time high.

The payment will be derived from undistributed profit after tax in 2024. At the end of last year, the company had VND1,348.7 billion ($51.7 million) in undistributed profit after tax. After paying the dividends, there will be VND206 billion left.

Last year, the oil and gas transportation company reported record revenue and profit after tax of VND11,732 billion and VND1,470 billion ($56.35 million), respectively, up 22% and 20.3% against 2023.

In addition to increasing the efficiency of fleet exploitation, the company liquidated ships during the year, generating an additional operating profit of VND180 billion ($6.9 million). This is the basis for the firm to pay a record dividend for 2024.

On the Ho Chi Minh Stock Exchange (HoSE), after peaking at VND30,000 apiece in June 2024, PVT shares began to fall sharply to the bottom in early April (VND20,000) - the time when President Trump announced shocking reciprocal tariffs. PVT recovered to VND24,900 ($0.95)/share as of 2:30 p.m. on Monday.

Uncertain industry context with falling freight rates

At its 2025 AGM held at the end of April, PVTrans leaders assessed that the transportation market is directly affected by the global tariff situation in the context of increasing protectionism and populist policies threatening globalization.

Geopolitical turbulences have caused strong disruptions to shipping routes and trade between countries. After a period of rapid growth in 2022-2024, current freight rates are being adjusted down by about 10-20% compared to the average in 2024, especially in the bulk ship and product segments.

At the same time, the shipbuilding market is accelerating again to compensate for the shortage of supply and replace old ships that have been dismantled, creating a new balance of supply and demand.

The company's business results have been closely linked to oil price movements. From April 2024, oil prices continuously decreased, from the $91/barrel range to the $62/barrel range at the end of May.

The prices have recently rebounded to the $75/barrel range after news of Israel's attack on Iran escalated tensions in the Middle East, raising concerns about disruptions in oil supplies.

PVTrans's board of directors believes that managing and limiting risks related to oil price fluctuations is necessary to maintain stability in business operations.

For domestic transportation contracts, freight rates are flexibly adjusted according to oil price fluctuations. For the international market, PVTrans prioritizes operating ships in the form of time charters, in which ship owners do not have to pay fuel costs.

Given this context, PVTrans set a target of VND10,300 billion ($394.9 million) in revenue and VND960 billion ($36.81 million) in after-tax profit for this year, down 12% and 25% respectively from 2024. Dividends returned to 10%.

Historically, PVTrans has a tradition of setting business targets much lower than the previous year and often exceeding them. This year, the board of directors said that it will strive for 2025 business results to continue to grow compared to 2024.

In the first quarter of the year, the company reported revenue of VND2,790 billion, up 10%, but after-tax profit decreased by 9% to VND277 billion ($10.62 million). The reasons were lower fares and lower gross profit margins.

The company said that in 2024, PV Trans and its member units invested in eight new ships, bringing the total fleet to 58 ships, with a total tonnage of more than 1.7 million DWT.

The parent company alone was only able to invest in two out of four ships due to unfavorable market conditions. The ship investment plan was carried forward to 2025 with a budget of VND3,525 billion ($135.15 million).

This year, the approved investment portfolio of the entire corporation is 19-24 ships, of which the parent company will invest in 3-6 ships.

However, due to the uncertain market situation, PVTrans plans to invest in only about 7-8 ships, focusing on Aframax crude oil ships, VLGC gas ships, chemical ships, and MR product ships.