Shipping firms have wind in their sails as rates, demand surge

By Tat Dat   April 24, 2022 | 08:17 pm PT
Shipping firms have wind in their sails as rates, demand surge
PVT Mercury, a crude oil tanker of the Petrovietnam Transportation Corporation. Photo courtesy of the company
Many shipping companies are targeting double digit growth this year, mainly based on higher freight rates and recovering demand from the manufacturing sector.

Vietnam’s largest listed shipping company Gemadept Corporation expects a 19 percent rise in revenues this year to VND3.8 trillion ($165.4 million), and profits to grow by 24 percent to VND1 trillion.

The Hai An Transport and Stevedoring Joint Stock Company expects profit to grow 23 percent to VND550 billion, and Vinaship by 15 percent to VND208 billion. If these targets are achieved, the firms can offset losses accumulated over years of bad business.

The Mirae Assets Securities Vietnam (MASVN) says shipping and seaport logistic firms will earn more profit this year thanks to the manufacturing recovery.

Meanwhile, the Vietcombank Securities (VCBS) company forecasts that shipping companies will keep growing despite slow recovery of large markets and delay in delivery of container ships.

Last year, they profited from soaring international freight rates, which may cool down, but could not return to pre-pandemic levels this year, a VCBS report says.

SSI Securities has also outlined a prosperous outlook for the industry, saying domestic rates will also surge significantly this year.

Freighters have focused on upgrading their fleets and expanding networks to take advantage of the situation, with Hai An mulling new intra-Asian routes and adding 4-5 ships to its fleet.

Vietnam Petroleum Transport (VIPCO) is set to liquidate one of its oil tankers and invest in new ships to boost transport capacity.

But analysts are also warning of possible downturns related to Covid-19 in the near future.

MASVN said the international shipping market is at risk of congestion and supply chain disruption caused by prolonged clearance time over pandemic’s safety regulations and restrictions like China’s zero Covid strategy.

Some firms are set to see profits shrink this year due to the ongoing instability in the Middle East and Ukraine, which has driven oil prices and fuel costs up.

Petrovietnam Transportation Corporation (PVT) expects its post-tax profits to drop by 48 percent to the lowest since 2015, while Vietnam National Shipping Line (Vinalines) cut its pre-tax profit target by 30 percent, saying its members will restructure their fleets this year.

Shipping stocks have been surging since the beginning of this year, especially in March when the Russia-Ukraine conflict broke out.

At the end of Friday’s session, GMD of Gemadept traded at VND52,400 a share, up 30 percent from its fallen figure in January, and HAH of Hai An traded at VND98,500, up 67 percent.

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