Seaport enterprises set for promising year in 2022

The seaport industry is expected to continue to grow strongly this year thanks to active import and export activities and the fact that Viet Nam remains an attractive destination for FDI inflows. Higher handling fees will also benefit seaport enterprises.
A container ship anchored at Tan Cang Cai Mep - Thi Vai Terminal. (Photo: VNA)
A container ship anchored at Tan Cang Cai Mep - Thi Vai Terminal. (Photo: VNA)

ACB Securities Ltd. (ACBS) said that in 2022 it was expected that transportation activities will remain stable, with the volume of goods up about 6 percent.

The volume of goods transported through Vietnamese seaports in 2022 is forecast to reach 750 million tonnes, up about 3 percent compared to last year, the security firm added.

The industry's growth is driven by the recovery and reopening of the global economy thanks to the higher COVID-19 vaccination rate, helping trading activities.

Viet Nam is still an attractive destination for FDI inflows due to the disruption of the global supply chains and the wave of a production shift. The country also benefits from many free trade agreements.

FDI inflows into Viet Nam recorded a compound growth rate of over 8 percent in 2014-2020, boosting the volume of goods transported through seaports. In 2021, FDI capital is estimated at 31.15 billion USD, up 9.2 percent over 2020.

In addition, the Ministry of Transport is submitting to the Government a draft amendment to a circular on handling fees at Vietnamese seaports. Handling fees at ports will increase by 10 percent in 2022-2024 depending on the port area, resulting in higher profits for seaport enterprises.

However, ACBS also pointed out challenges the industry is likely to face in 2022, including higher freight rates, which increase short-term risks.

Due to the scarcity of containers and congestion at major ports in the world, freight rates have surged, which reduces the number of goods circulating through seaports. Rising oil prices also push transportation costs higher, reducing shipping demand.

The continuing complexity of the COVID-19 pandemic still badly affects global supply chains, causing lower consumer demand and negatively impacting the workforce in the industry.

Despite the developments of COVID-19, Vietnamese seaport enterprises still witnessed outstanding growth in profits last year.

The fourth quarter business result of the Vietnam National Shipping Lines (VIMC) showed that its profit after tax reached 2.9 trillion VND in 2021, 14 times higher than that of 2020.

Its shipping volume was 23 million tonnes, reaching 121 percent of the planned. After many years of losses, VIMC's shipping sector posted a positive performance in 2021.

Sixteen VIMC seaports have handled over 125 million tonnes of goods, up 13 percent compared to 2020.

VIMC's port system has also developed 13 new routes for container shipping lines. The sector continues to be the most effective business activity of the company, accounting for 78 percent of total consolidated profit.

Hai Phong Port also posted net revenue of 2.2 trillion VND in 2021, up 12.5 percent year-on-year, with profit after tax reaching nearly 694.6 billion VND, up more than 23 percent.

Similarly, Saigon Port's net revenue climbed by 46.6 percent year-on-year to 1.37 trillion VND last year, while its profit after tax attained 893.4 billion VND, nearly four times higher than in 2020.

In the last quarter financial statement of 2021, VIP Greenport saw a gain of nearly 10 percent over 2020 to 816.1 billion VND in net revenue, resulting in a profit after tax of 203.7 billion VND, up 34.2 percent.

VIP Greenport operates in cargo handling, seaport services, warehousing and coastal freight transport services.

Analysts from SSI Securities Corporation said that on the stock market, the seaport and logistics stock value grew up to 94 percent in 2021, 60 percent higher than the market benchmark VN-Index. Of which, MVN surged by 205 percent, SGP up 183 percent, PHP jumped 72 percent and VGR up 30.7 percent.

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(Source: VNA)