Import-export recovery prompts maritime growth
Import-export recovery prompts maritime growth
Marine transport companies delivered strong performances in the first six months of 2024, driven by a rebound in global trade.
Hai An Transport & Stevedoring JSC, a container transport company, last week reported a significant recovery in core operating profit compared to the low base in the first half of 2023.
After facing challenges in February and March, the company’s container volume rebounded, with net revenue jumping 34.8 per cent on-quarter. This surge was largely attributed to higher container volume in the first half of 2024, buoyed by the recovery of trading activity, expansion of its fleet capacity, and revised charter contracts with higher base rates.
Logistics Vicem JSC, which operates in water and road transportation, posted an after-tax profit of VND3.8 billion ($1.58 million) in the first six months of 2024, marking a 188 per cent increase against the same period last year. The strong growth in freight volume during the second quarter of 2024 contributed to increased revenue from transportation. Additionally, by cutting expenses, the company reduced its cost of capital, which boosted its profit.
Vietnam Ocean Shipping JSC (VOSCO), primarily a bulk commodities transporter, saw its net profit rise nearly 70 per cent on-year in the first half of 2024, largely due to the divestment of a 20-year-old vessel for approximately VND350 billion ($14.3 million).
However, excluding this extraordinary item, VOSCO’s core operating profit was only half of last year’s. Moreover, its fleet operates mainly in the domestic market, which remains at a low base. The company’s new board of directors, which was appointed in August, will need time to implement strategies aimed at improving its performance.
Elsewhere, Southern Waterborne Transport Corporation reported an after-tax profit of $4.7 million in the first half of 2024, up $1 million on-year. The company attributed these positive results to improved business and production operations.
Hung Nguyen, an analyst at ACB Securities, said, “In the first half of 2024, the total value of imports and exports reached $368.6 billion, marking a 16.4 per cent on-year increase. Specifically, export value was $190.1 billion and import value was $178.5 billion, up 15.6 and 17.2 per cent on-year, respectively. Vietnam’s strong recovery in imports and exports has driven growth in maritime transportation.”
“Total sea cargo throughput in the country shifted positively in the first half of 2024, thanks to the recovery in global trade. Specifically, total volume through seaports reached 427.7 million tonnes, up 18 per cent on-year, with container cargo hitting 14.4 million TEUs, up 22 per cent on-year.”
Dang Huy Hoang, research analyst at VNDirect Securities, cited data from the General Statistics Office showing that domestic sea freight revenue increased by 12.5 per cent on-year in the first half of 2024.
“Maritime transport companies have benefited from the recovery of trading activity, as evidenced by a 13 per cent on-year rise in seaport throughput and a modest 1.4 per cent on-year increase in freight rates,” he said. “There were also notable disruptions in the Red Sea, which created a capacity shortage and drove up container rates from December 2023. We believe that the longer this persists, the more volatile container rates will become.”
For the second half of 2024, VNDirect Securities forecasts a slight increase in maritime company volumes compared to the first six months, due to a gradual rise in domestic consumption demand, albeit at a slow pace, and the earlier-than-usual peak season for global trade, which arrived in June-July of 2024. This may result in less significant demand growth later in the year.
“Instead, we see 2024 as a year of recovery, with maritime service companies poised for clearer benefits in 2025 as market conditions become more favourable,” Hoang added.
