Viconship (VCS) bolsters core business through ongoing M&A efforts
Viconship (VCS) bolsters core business through ongoing M&A efforts
Vietnam Container Shipping (Viconship) has been consistently ramping up its merger and acquisition (M&A) activities, as part of its strategic divestment from non-core sectors, to focus on expanding its core business domains.
A ship docks at the Green Port under Viconship. — Photo viconship.com |
These moves underscore the company's substantial ambitions in the transportation and maritime market of the Northern region. The enterprise's most recent target is Vinaship JSC.
The leading port enterprise in Hải Phòng City has recently completed the acquisition of close to 12.8 million VNA shares, representing 37.55 per cent of the charter capital of Vinaship, at an anticipated price of VNĐ27,000per share, totalling around VNĐ345 billion (US$13.8 million).
This strategic move has boosted Viconship's stake in Vinaship from 836,000 shares (a 2.46 per cent stake) to over 13.6 million shares (a 40.01 per cent stake).
Previously, Vinaship had granted approval for the share transfer to Viconship from existing shareholders without the need for a public tender offer, streamlining Viconship's efforts to increase its ownership in the company.
Viconship is currently concentrating on two primary business sectors: maritime ports and logistics, encompassing container yards, warehouses, land transportation and various other logistics services.
In the maritime ports industry, Viconship stands as the leading port enterprise in Hải Phòng City, operating within the Cấm River region and overseeing four ports, including the upstream Green Port and the downstream VIP Green, VIMC Đình Vũ and Nam Hải Đình Vũ ports.
In July, Viconship completed the acquisition of nearly 100 per cent ownership of Nam Hải Đình Vũ, strategically linking the three downstream port clusters.
This integration extended the combined port bridge length to approximately 1.6 km, optimising operational efficiency by streamlining vessel scheduling and reception within the area.
Notably it slashed operational and outsourcing expenses for Viconship, empowering the company to proactively manage vessel reception and operations, while minimising the need for inter-port vessel transfers.
In the realm of logistics, Viconship's missing puzzle piece is maritime transport - a key component preventing the company from fully realising its strategy to deliver enhanced value-added services to clients. This encompasses providing comprehensive service packages to customers spanning port operations, transportation, warehousing, and customs procedures.
Meanwhile, Vinaship stands as a prominent maritime transport enterprise boasting a fleet of five vessels with a combined tonnage of 95,861 DWT, averaging over 20 years in service.
Viconship's biennial audit report for 2024 flagged a VNĐ47 billion accounts receivable. As per the explanation, these funds represent deposits from individuals enabling the company to acquire transferred capital, aiming to secure a controlling interest in a target firm within the maritime transport sector.
Although Viconship didn't give any details, this deposit likely aligns with its earlier plans to engage in share transfers, possibly involving Vinaship shares.
In 2024, Viconship also sets its sights on making a substantial investment deposit in a deep-water port located in the Lạch Huyền region of Hải Phòng City, with a projected sum of up to VNĐ1 trillion.
Trim holdings in non-essential areas
Containers being unloaded at the Green Port in Hải Phòng City. — Photo viconship.com |
Amid its expansion endeavours and core business focus, Viconship aggressively revamps its corporate structure while divesting from various other investment ventures.
For example, on June 27, Viconship approved ending the Hyatt Place Hotel project cooperation with T&D Group. Receivables from this project total VNĐ823.6 billion. T&D Group will repay Viconship's subsidiaries in two instalments, with the whole sum expected by December 31, 2024.
Viconship also divested a 30 per cent stake in T.S Container Line Hanoi Company in August and transferred 22.05 per cent of Đình Vũ Petroleum Service Port in September.
The company readies resources for expanding in Hải Phòng City to attract FDI. Upcoming plans include enhancing industrial zones like the Đình Vũ - Cát Hải Economic Zone and establishing 15 new industrial zones spanning 6,200 hectares.
Trade in Hải Phòng City is booming, alongside industrial zone growth. The city aims to be a top industrial and seaport hub by 2050, benefiting Viconship.
In the first half of 2024, Viconship's revenue surged to VNĐ1.3 trillion, up 31 per cent year-on-year, with profit after tax reaching VNĐ161.5 billion, a 109.4 per cent increase.
DSC Securities Company projects 2024 revenue at nearly VNĐ2.5 trillion and profits at VNĐ257 billion, up 13 per cent and 29 per cent from 2023.
Despite lower costs post-acquisition, Viconship's gross profit margin is expected to stabilise at 30 per cent. Utilisation at Nam Hải Đình Vũ in 2024 is estimated at 40 per cent, driven by transfers from Viconship's main ports. Scaling up may face challenges due to competition and customer acquisition difficulties.
Viconship faces competition challenges in core services like port operations in Hải Phòng City this year, alongside ongoing customer difficulties impacting business.
After acquiring 12.76 million shares, Viconship now owns 40.01 per cent of Vinaship. Despite gaining voting rights on key decisions, ultimate control of Vinaship lies with Vietnam National Shipping Lines (Vinalines), the majority shareholder with a 51 per cent stake.
Viconship's involvement streamlines Vinaship's shareholders without altering Vinalines' final decision-making powers.
On the stock market, Viconship's shares ended Tuesday at VNĐ17,200 per share.
