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Seaport enterprises simultaneously exceeded 2019 plan

Seaport enterprises simultaneously exceeded 2019 plan

Wednesday 19, 02 2020
Despite announcing that their profit had exceeded the plan, many seaport enterprises saw a drop in profit compared to 2018.

Seaport companies listed on two stock exchanges have announced their financial statements in 2019. While there are businesses that achieved growth in both revenue and profit, many businesses in this group received decreased business results.

Decreased or slightly increased turnover

The general trend in 2019 of most seaport groups was to reduce or slightly increase revenue, accompanied by narrowing profit margins. In which, for the industry giant, Gemadept (GMD), though the revenue from port operation business had increased by 3.4%, the logistics sector could no longer merge with joint-venture companies due to the sale of capital last year, causing the revenue of this port business to decrease by 9% compared to 2018.

Similarly, Dinh Vu Port (DVP), Da Nang Port (CDN), and Cam Ranh Port (CCR) also saw major decreases in revenue in 2019 compared to that in 2018. After that, some other seaport enterprises including Hai Phong Port (PHP), Vinconship (VSC), Hai An Loading and unloading (HAH), Vip Green Port (VGR) also saw slight increases in revenue of less than 6% in 2019. Doan Xa Port (DXP), Da Nang Port (CDN), and Dong Nai Port (PDN) were among the few businesses that maintained double-digit growth and improved profit margins in 2019.

In which PDN said that the competition is not fierce and investing to expand the warehouse area helps the company to facilitate the exploitation of goods. Along with the decrease in revenue, the gross profit margin of seaport enterprises was improved thanks to cost savings.

Profit: increase and decrease differently

Seaport enterprises simultaneously exceeded 2019 plan

Gemadept (GMD) faced the strongest profit decline. The company reported a net profit of only 515 billion dong, which is a sharp decrease compared to the same period last year as it received a profit from the transfer of a part of the capital. However, profit from business activities increased by VND 95.7 billion due to the increase in the efficiency of port operations and logistics. Vinconship (VSC), SGP, HAH, VGR, and DVP, in turn, announced declines in revenue from 9.8% to 22%, Cat Lai Port also reported a slight decrease of 2.2% compared to 2018.

In the opposite direction, Cam Ranh Port (CCR) reported the strongest growth, up 56% over the same period. The company stated that the volume of cargo handled through the port increased, specifically in exported bulk cargo and imported equipment and components, resulting in a high increase of profit compared to the same period last year.

Another business in the seaport industry that also reported strong profit growth this year is Doan Xa Port (DXP), whose net profit reached VND 41 billion, up 20.6% over the same period. As the port is located upstream of the Cam River, Doan Xa port used to have a difficult time gradually moving from receiving container cargo to bulk cargo. Remarkably, although most of the companies reported a drop in profit compared to the same period, compared to the business plan in 2019 approved at the General Meeting of Shareholders in 2019, the seaport enterprises have exceeded the original goal plan. Doan Xa and Cam Ranh ports are even far beyond their business targets for the whole year of 2019, thus showing their business caution in 2019.

Entering 2020, this businesses group has not yet given any specific business plan figures but with the VN-EU free trade agreement (VN-EU FTA) expected to take effect from the second half of the year, FDI inflows are expected to continue to create demand for B2B transport services/ports, while simultaneously e-commerce growth will help increase the B2C and C2C transport demand. These will be favorable business activities for this group of enterprises in the future.

>> Vietnam’s logistics industry: 5-year potential

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