Bright prospects for seaport businesses

The total value of products passing through seaports in the first ten months of 2023 is anticipated to be 624.559 million tons, a 3% rise over the same period in 2022, according to the Vietnam Maritime Administration.

According to the Vietnam Maritime Administration, the overall amount of commodities passing through seaports increased in the first ten months of 2023. In particular, the volume of products passing through seaports in the first ten months of 2023 is expected to be 624.559 million tons, a 3% rise over the same period in 2022. While export volumes fell by roughly 1%, import volumes increased by nearly 5%.The volume of goods through seaports in the first 10 months of 2023 is estimated at 624.559 million tons, a 3% increase compared to the same period in 2022.

The volume of goods through seaports in the first 10 months of 2023 is estimated at 624.559 million tons, a 3% increase compared to the same period in 2022.

After declining from the second to third quarters of 2022, the volume of commodities passing through seaports appeared to have bottomed out in the first quarter of 2023 and began to rebound. Prior to that, the amount of goods passing through seaports reached 564.917 million tons in the first nine months of 2023 (excluding transshipment cargo not discharged at the ports), a 3% rise.

Notably, after many months of decrease, several locations have experienced a rise in the volume of products passing via seaports, such as Ho Chi Minh City, which increased by 2.72%, Quang Ninh, which increased by 4.8%, and Hai Phong, which increased by 0.8% compared to the same time.

Some regions had considerable increases in cargo volume, including Nha Trang (16.86% increase), Nghe An (17% increase), Dong Nai (10% increase), Can Tho (29% increase), and Binh Thuan (21% increase). There were also significant gains in locations with low cargo volumes, such as Dong Thap and Thua Thien - Hue, with growth rates of 59% and 44.21%, respectively, compared to the previous year. Only one seaport location saw a significant decline in goods throughput, Vung Tau, which fell by 2% but was less than in prior months.

Although there was a reduction in container freight volume through seaports (measured in TEUs), it was significantly smaller than in prior months. In particular, the amount of container freight passing through seaports declined by 3% in the first nine months of 2023 compared to the same period in 2022, reaching 18.36 million TEUs. The volume of container freight passing through seaports in the first ten months of 2023 fell by roughly 3%, to 20.29 million TEUs.

Some locations had a rise in container cargo volume, such as Dong Thap, which saw a 68% increase, Quy Nhon, which saw a 21.28% increase, Dong Nai, which saw a 21% increase, and Nghe An, which saw a 10% increase, compared to the previous year. However, locations with high container traffic volumes, like as Ho Chi Minh City, had a 3.7% reduction, while Vung Tau and Hai Phong saw 11% and 1.7% decreases, respectively.

According to the Vietnam marine Administration, although marine transport still confronts numerous obstacles at the end of the year, the data demonstrate that the business is progressively exhibiting indications of recovery.

Yuanta Vietnam said overall import and export turnover in the first nine months of 2023 was 497.66 billion USD. Despite an 11% fall from the same period last year, import and export turnover has been showing indications of bottoming out since the beginning of the year and has been progressively rebounding in recent months. It is worth mentioning that FDI capital registered into Vietnam in the first nine months of 2023 reached 20.2 billion USD, an 8% rise over the same period in 2022; realized FDI capital was around 15.9 billion USD, a 2.2% increase over the same period last year. FDI inflows into the nation are projected to expand further in the near future.

All of these reasons, in aggregate, have fueled the revival of listed seaport enterprises. Many units reported improved earnings in the third quarter of 2023, according to the financial statements for the third quarter of 2022. The most prominent is Saigon Port Joint Stock Company (UPCOM: SGP), which reported a post-tax profit of more than 94.1 billion VND in the third quarter of 2023, virtually tripling its profit from the same time previous year. The primary reason for this is that SGP has repaid roughly 55 billion VND in provisions.

Dong Nai Port Joint Stock Company (HoSE: PDN) comes next, with a net revenue of over 300 billion VND and a gross profit of 119 billion VND in the third quarter of 2023, representing a 9% and 22% growth over the same period last year. The gross profit margin increased to 39% from 35% previously. PDN's net profit after costs and taxes was 80.5 billion VND, a 19% increase over the same time previous year. This sum was nearly constant from the second quarter of 2023, allowing PDN to retain the greatest quarterly profit level in its operating history.

Many seaport businesses have reported increased profits in the third quarter of 2023 compared to the same period last year.Danang Port Joint Stock Company (HNX: CDN) reported financial results for the third quarter of 2023, with revenue of 319 billion VND, an increase of 12 billion VND over the same time in 2022. The gross profit from sales was 111 billion VND, a 2 billion VND reduction over the same time in 2022. Despite the modest decline in gross profit, CDN's net profit after tax climbed by 3% year on year, reaching 67 billion VND.

Furthermore, Green VIP Port Joint Stock Company (UPCOM: VGR) reported a post-tax profit of 74.8 billion VND in the third quarter of 2023, representing a nearly 19.3% increase over the same period last year; Can Tho Port Joint Stock Company (UPCOM: CCT) reported a post-tax profit of 3.3 billion VND, nearly 2.5 times higher than the same period last year.

In contrast, Hai Phong Port Joint Stock Company (UPCOM: PHP) reported a net profit of 163 billion VND in the third quarter of 2023, a 10.1% reduction. Similarly, Investment and Development of Dinh Vu Port Joint Stock Company (HoSE: DVP) recorded a post-tax profit of 51.2 billion VND in the third quarter of 2023, a decline of more than 45.2%.

Not only that, but Yuanta Vietnam Securities Joint Stock Company anticipates bright prospects for seaport businesses as a result of the proposed increase in container handling service fees beginning January 1, 2024, which will replace Circular 54/2018/TT-BGTVT on the price framework for services such as mooring, using buoys, container loading and unloading, and towing services. For most ports, handling service costs are likely to rise by 10% over the standard price.

Furthermore, Yuanta Vietnam predicts that the price rise would raise income for eligible ports, particularly deep-water ports capable of accepting ships larger than 160,000 DWT, encouraging port firms to utilize clean fuel in accordance with government policy.

The draft also suggests raising the maximum fee for vessels anchored at bridges, ports, and ships receiving orders to leave the port but still holding berths to 19 VND/GT/hour (an increase of 4 VND from the present rate). Yuanta Vietnam believes that this would allow port enterprises to negotiate more flexible rates with clients. However, in the current environment, the positive influence may be little.

Furthermore, the recovery in freight prices is likely to benefit the maritime industry. According to Yuanta Vietnam, the Baltic Dry Index, which measures the global cost of dry bulk shipping, has been showing indications of recovery since September 2023 and is now at its highest level since the beginning of the year, albeit it is still three times lower than the peak in early October 2021.

Container shipping prices worldwide have likewise recovered to pre-pandemic levels. The worldwide container index, which represents container shipping rates, has dropped by more than 80% from its peak in September 2021, approaching pre-pandemic levels.

According to Yuanta, freight rates and charter rates will begin to rise in late 2023 and 2024 since freight prices have reverted to low levels relative to the previous era and are close to the pre-COVID-19 period, making further decreases improbable. Demand for cargo transportation is increasing as the global economy improves and inflation falls, but ship availability remains unchanged.

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