Shipping firms sail past annual profit target in 9 months

The Petrovietnam Transportation Corporation recorded after-tax profits of nearly VND390 billion ($15.7 million) in the third quarter, more than 2.5 times year-on-year. Its pre-tax profits of over VND1.035 trillion in the first nine months exceeded 72% of its annual plan.

The Hai An Transport and Stevedoring Joint Stock Company saw its Q3 after-tax profit increase by over 2.7 times year-on-year to VND270 billion. The firm’s profit in the first nine months was 1.5 times bigger than its yearly plan.

Similarly, Gemadept Corporation’s profit in the third quarter surged by over 76% to nearly VND290 billion. Its after-tax profit rose nearly 84%, realizing 94% of the annual plan.

The Vietnam Ocean Shipping Jsc Earned gained pre-tax profits of VND566 billion in the first nine months, a 38% year-on-year increase, and exceeding the annual plan by 45%.

While it saw a fall in Q3 profit, the Vietnam National Shipping Lines posted profits of over VND2.77 trillion in the first nine months, a year-on-year increase of more than 30% and more than 10% of the annual plan.

Many shipping firms attribute the bigger profits to high demand and high freight charges. A manager with the Petrovietnam Transportation Corporation said freight charges had increased in the third quarter, resulting in bigger revenues.

Over 77.8 million tons of cargo was transported by sea in the first nine months, up 27.5% over the same period last year, according to the General Statistics Office.

According to data from Freightos, one of the world’s largest freight booking platforms, Feightos Baltic Index, the global container shipping index, fell from $6,577 to $4,060 in the third quarter. However, the rate was still 2-3 times higher than the average of $1,800-2,000 in the same period last year. Compared with the third quarter of 2019, the rate was nearly 3.5 times higher.

In Vietnam, the sea freight index increased nearly 5% in the third quarter, and rose over 11% in the first nine months.

Brokerage firm SSI Securities has predicted that the global index will gradually return to normal due to weaker demand and bigger supply of container ships in the last months of this year. Freight charges may decrease sharply next year if supply chain disruptions die down and China reopens to the outside world, it said.

In Vietnam, charges may remain at their peak in 2023 as the market is still undersupplied as most of the Vietnamese fleet is leased to foreign markets under long-term contracts, according to SSI Securities.