Shipping companies (HAH) enjoy positive earnings thanks to high sea freight rates
Shipping companies (HAH) enjoy positive earnings thanks to high sea freight rates
Record-high sea freight rates have seen shipping companies produce positive second-quarter earnings reports.
The VN-Index gained 41.22 points last week, or 3.25 per cent to close at 1,310.05 points after three consecutive weeks of decline. Total trading value on the Ho Chi Minh Stock Exchange (HOSE) fell 7.3 per cent to VND84.9 trillion (US$3.7 billion).
Shares of Hai An Transport & Stevedoring JSC (HAH) increased 12.06 per cent, Vinaship JSC (VNA) rose by 11.17 per cent, Duyen Hai Multi Modal Transport JSC (TCO) 6.98 per cent, Vietnam Ocean Shipping JSC (VOS) 6.29 per cent, Petrovietnam Transportation Corporation (PVT) 5.11 per cent and Pacific Petroleum Transportation JSC (PVP) 4.17 per cent.
In the second quarter, Hai An Transport & Stevedoring JSC (HAH) recorded a 72 per cent increase in net revenue compared to the same period last year, reaching VND449.3 billion with a net profit of VND97.7 billion, up 150 per cent.
In the first six months of the year, HAH's revenue reached VND808 billion and post-tax profit recorded more than VND183.2 billion, up 49 per cent and 161 per cent, respectively. With this result, HAH only fulfilled 49 per cent of its revenue target but surpassed its profit target by 16 per cent.
The Petrovietnam Transportation Corporation (PVT) also reported Q2 revenue of VND1.87 trillion, a slight increase over last year. Post-tax profit rose by 8 per cent to VND256.5 billion. In the first half of this year, PVT collected VND3.6 trillion in revenue, completing 60 per cent of its yearly plan and VND438.9 billion in post-tax profit, exceeding 8.6 per cent of its yearly plan.
The net revenue of Vietnam Ocean Shipping JSC (VOS) decreased slightly compared to the same period last year, reaching VND325 billion, but post-tax profit was VND242 billion. During the same period last year it suffered a loss of VND32 billion.
In six months, VOS recorded revenue of VND580 billion, down 15 per cent year-on-year and fulfilling 47 per cent of the yearly revenue target. Post-tax profit reached VND222 billion, 7.4 times higher than the yearly plan, while in the same period last year it lost VND118.2 billion.
Last week, shares of Seagull Shipping Company (SSG) increased by 25.93 per cent, from VND5,400 per share to VND6,800 per share. In the June 9 session, SSG suddenly hit the daily limit rise of 12.5 per cent, starting a series of rising prices in the sessions that followed. Since its listing so far, SSG has increased by 183.3 per cent.
At the annual general meeting of shareholders in 2021, the company submitted a business plan to shareholders with total annual transportation revenue of VND23.4 billion and an after-tax loss of VND200 million. However, 32.85 per cent disagreed and asked the company to adjust revenue to VND24.9 billion and post-tax profit to VND1.3 billion. SSG has adjusted the plan accordingly, but so far the company has not announced its second quarter results.
Shares of Transport And Chartering Corporation (VFR) also increased by 20.45 per cent during the week, rising from VND4,400 per share to VND5,300 per share.
Recently, VFR announced Q2 revenue of VND37.4 billion, down slightly over the same period last year. Post-tax profit still reached VND7.8 billion while in the same period last year it lost VND 7.4 billion.
In the first six months, VFR's net revenue reached VND78.6 billion, down 5.1 per cent year-on-year. Post-tax profit was VND1.3 billion while it lost VND21.9 billion last year.
Shares of Transportation and Trading Services Joint Stock Company (TJC) also recorded growth of 17.02 per cent last week.
In the second quarter, TJC's net revenue reached VND33.8 billion, up 42 per cent, post-tax it was VND3.1 billion. In the first six months, the company recorded revenue of VND62.9 billion, up 22.1 per cent. Post-tax profit reached VND4.7 billion, 899 times higher than the same period last year. With the yearly target of pre-tax profit of VND2.5 billion, the company has exceeded its plan for the whole year.
Since July 2020, sea freight rates worldwide have begun to increase sharply.
According to the Viet Nam Maritime Administration, the sea freight rate (including surcharges) from Viet Nam to the US for the highest 40 feet container is $14,250 per container, the lowest is $8,000 per container. So far, there have been at least four upward adjustments, 14 times higher than at the beginning of 2020.
The World Shipping Council (WTC) previously said that it would be difficult to determine when shipping costs will peak as global demand has not yet fully recovered.
SSI Research said that there were many factors affecting the shipping market. Some factors were temporary while others were quite long-term and will not change anytime soon.
“This means that an escalation of short-term factors could push freight rates to new highs, but are not sustainable in the long-term,” it said.
Accordingly, SSI forecasts that freight rates may peak in the fourth quarter of 2021, then adjust slightly in the first half of 2022.
“Freight rates may decrease significantly in 2023 when the supply of new ships comes into operation, but will maintain a higher level than before the COVID-19 pandemic as carriers gain more experience in supply management and increase cooperation,” it said.
