Shipping rates increase, many businesses in shipping industry make great profits

6 min read

According to the Vietnam Maritime Administration, in the first quarter of 2021, the total import and export value of goods reached 154 billion USD, up 25.4% over the same period last year. In which, exports reached 75.6 billion USD, up 27%; imports reached 78.4 billion USD, up 24%. China is still Vietnam’s largest import-export market with a turnover accounting for 24%, followed by the US with 16%, South Korea with 12%.

The lack of empty containers has led to a spike in freight rates.

Total volume of goods through seaports nationwide in the first quarter reached 172.45 million tons, up 7%. Container cargo alone recorded an increase of 17% to more than 5.9 million Teu, a high growth rate in recent years.

Many exporters in Ho Chi Minh City reflected that although they had orders waiting for export, they could not order containers to ship due to lack of empty containers. In addition to the lack of empty containers for export, the increased transportation, storage and preservation fees make businesses face many difficulties.

From November 2020 to the end of March 2021, the shortage of empty containers occurred frequently but less seriously. However, since the Suez Canal incident, the shortage of empty containers has worsened. Shipping rates of shipping lines also increased from $3,500 to $8,000/container.

The Vietnam Association of Seafood Exporters and Producers (Vasep) said that many seafood businesses reflected that as soon as the freight rates to Europe cooled down, the routes to the US were very tense.

According to Vasep, from November 2020 until now, the rental price of a container ship from Vietnam to other countries has increased from 2 to 10 times. Specifically, from Vietnam to the UK in October 2020 is 1,420 USD/cont 20feet, by November 2020 has increased to 5,420 USD/cont 20feet, and up to 7,200 USD/cont 20feet for export orders in December. 2020. The rental price of a ship to transport containers from Thailand to Vietnam before October 2020 is 60 USD/cont, by November 2020 it is 600 USD/cont.

The rental price of a container ship from Vietnam to Los Angeles (USA) before October 2020 was only 700-1,000 USD/cont, but by November 2020 it had increased to 5,000 USD/cont. In addition, at the end of October 2020, many container shipping lines simultaneously sent notices to customers requesting an increase in the surcharge for transporting empty containers from surplus to deficient places for containers from Vietnam to European markets. Asia, with an increase of 50 – 200 USD/cont (since November 1, 2020). In addition, shortly after that, a number of shipping lines such as Yaming Shipping Vietnam also announced an increase in the peak season surcharge from 150 to 450 USD.

According to Vasep, most recently, MSC announced that, starting from April, it will cut all frozen goods to the US. This will increase the load on another line that has been overloaded for many months. Moreover, many shipping lines do not allow reservations in advance, and if you wait until the date of shipment to book a trip, there is no place to register.

Enterprises in the shipping industry benefit

According to the financial report for the first quarter of 2021, Gemadept Joint Stock Company (HoSE: GMD) recorded a revenue of more than VND 687 billion, up 14.4% over the same period. Profit after tax reached VND 171.8 billion, up 40.2% over the same period in 2020.

GMD’s profit after tax in the first quarter of 2021 reached VND 171.8 billion, up 40.2% over the same period in 2020.

In the first quarter of 2021, GMD’s gross profit increased by 9.1% over the same period to 259 billion dong; financial revenue increased by 30.1% to 21.6 billion dong; while financial expenses decreased by 51% to 27.5 billion dong; administrative expenses decreased by 23.4% to 65.8 billion dong; Other profit increased by 414.3% to 14.4 billion dong.

Besides positive business results, GMD’s cash flow also showed more positive signs than the same period last year. Specifically, in the first quarter of 2021, the cash flow from main business activities was positive 146.5 billion dong compared to the same period was 124.7 billion dong.

As of March 31, 2021, GMD’s total assets increased by 1.9% compared to the beginning of the year to VND 10,025 billion. In which, assets are mainly fixed assets, reaching VND 3,374 billion, accounting for 33.7% of total assets; long-term financial investment reached 2,516 billion dong, accounting for 25.1% of total assets; long-term unfinished assets reached VND 1,749 billion, accounting for 17.4% of total assets; Other long-term assets reached more than VND 975 billion, accounting for 9.7% of total assets.

Similarly, Hai An Transport and Handling Joint Stock Company (HoSE: HAH) recorded net revenue in the first quarter of 2021 reaching VND 359 billion, up 28% over the same period last year. In which, revenue from ship exploitation increased by 29% over the same period in 2020.

The increase in sea freight rates and the decrease in fuel oil prices over the same period were also factors that made the company’s profit after tax increase sharply.

Notably, the company’s other profit skyrocketed to VND22 billion due to the sale of HA Song ships. Due to the control of costs, at the end of the first quarter of the year, HAH recorded a profit after tax of VND 86 billion, up 177% over the same period in 2020.

According to the explanation of the business, the increase in profit is due to the positive signs of sea transport activities and increased demand. Along with the company’s investment in more HA View ships in July 2020, the volume of ships increased by 50% compared to the same period last year, resulting in an increase in the output of mining and depot operations.

Besides, the increase in sea freight rates and the decrease in fuel oil prices over the same period were also factors that made the company’s profit after tax increase sharply. In addition, the liquidation of ships also contributed to the company’s profit momentum.

By the end of the first quarter of 2021, HAH’s total assets reached VND 2,210 billion, up 5% compared to the beginning of the year. In which, cash and term deposits are VND 424 billion, accounting for 19% of total assets.

HAH’s liabilities at the end of the first quarter were VND 789 billion, up 4% compared to the beginning of the year and accounting for 36% of capital. In which, loans and finance lease debt is 436 billion dong. At the end of the period, the company’s equity is 1,421 billion VND, including 319 billion undistributed profit after tax.

In 2021, HAH sets a target of total revenue of VND 1,661 billion, profit after tax of VND 158 billion. Thus, after the first quarter, HAH fulfilled 22% of the revenue target and 54% of the year’s profit after tax target.

Another enterprise in the shipping industry, PetroVietnam Transportation Joint Stock Corporation (HoSE: PVT), the owner of the largest liquid cargo fleet in Vietnam, also had a favorable first quarter of the year, when net revenue reached 1,717 billion dong, up 9% over the same period. Profit after tax reached VND 173.8 billion, nearly 2 times higher than the same period in 2020, of which the parent company’s EAT was VND 136.4 billion.

With the possession of the largest liquid cargo fleet in Vietnam, PVT also had a favorable first quarter of 2021.

Financial income increased sharply by 78.2% over the same period last year to VND 39.2 billion, mainly interest in deposits and loans increased sharply. Meanwhile, financial expenses decreased significantly by 41.6% to 45.7 billion dong, mainly because the exchange rate loss in the period recorded only 4.4 billion dong, while in the first quarter of 2020 recorded more than 28 billion.

As of March 31, 2021, total assets of PVT increased by 2.6% compared to the beginning of the year to 11,379 billion VND. In which, assets are mainly fixed assets reaching 5,804 billion VND, accounting for more than half of total assets; cash and short-term financial investment reached VND 3,095 billion, accounting for 27.2% of total assets.

In the market after many years, PVT stock had a peak in mid-January 2021 at the price of 19,600 dong/share.

In addition, in the period, total short-term and long-term loans increased by 8% compared to the beginning of the year, respectively increased by 208 billion VND to 2,811 billion VND and accounted for 24.7% of total capital.

In the market after many years, PVT stock had a peak in mid-January 2021 at the price of 19,600 dong/share. Currently, PVT shares are trading around VND 16,500/share, up 16.4% compared to the beginning of the year and down 16.8% from the peak in mid-January 2021.

Source: enternews.vn – Translated by fintel.vn