The port industry is expected to continue to grow strongly this year thanks to active import and export activities and the fact that Vietnam remains an attractive destination for FDI inflows. Higher handling charges will also benefit port companies.
ACB Securities Ltd. (ACBS) said that in 2022, transport business is expected to remain flat, with cargo volume up around 6%.
The volume of goods transported through Vietnamese seaports in 2022 is expected to reach 750 million tons, up about 3 percent from last year, the brokerage firm added.
The growth of the industry is driven by the recovery and reopening of the global economy thanks to the higher vaccination rate against COVID-19, which helps business activities.
Vietnam remains an attractive destination for FDI inflows due to the disruption of global supply chains and the wave of production transfer. The country also benefits from numerous free trade agreements.
FDI inflows into Vietnam recorded a compound growth rate of over 8% in 2014-2020, increasing the volume of goods transported through seaports. In 2021, FDI capital is estimated at USD 31.15 billion, up 9.2% compared to 2020.
In addition, the Ministry of Transport submits to the government a draft amendment to a circular on handling charges in Vietnamese seaports. Port handling charges will increase by 10% in 2022-2024 depending on the port area, resulting in higher profits for port companies.
However, ACBS also highlighted challenges the industry is likely to face in 2022, including higher freight rates, which increase near-term risk.
Due to the scarcity of containers and congestion in major ports around the world, freight rates have increased, reducing the number of goods moving through seaports. Rising oil prices also push up transportation costs, reducing demand for shipping.
The ongoing complexity of the COVID-19 pandemic is still severely affecting global supply chains, driving down consumer demand and negatively impacting the industry’s workforce.
Despite the COVID-19 developments, Vietnamese port companies still recorded outstanding profit growth last year.
Vietnam National Shipping Lines’ (VIMC) fourth-quarter business result showed that its after-tax profit reached VND 2.9 trillion in 2021, 14 times higher than in 2020.
Its shipment volume was 23 million tons, reaching 121% of the plan. After many years of losses, VIMC’s marine business posted a positive performance in 2021.
Sixteen VIMC seaports handled more than 125 million tonnes of cargo, up 13% from 2020.
The VIMC port system has also developed 13 new routes for container shipping companies. The sector continues to be the company’s most efficient business activity, accounting for 78% of total consolidated profit.
Hai Phong Port also recorded a net income of VND2.2 trillion in 2021, up 12.5% year-on-year, with after-tax profit reaching nearly VND694.6 billion, up more than by 23%.
Similarly, the Port of Saigon’s net revenue rose 46.6% year-on-year to VND 1.37 trillion last year, while its after-tax profit reached VND 893.4 billion, nearly four times more than in 2020.
In the financial statements for the last quarter of 2021, VIP Greenport recorded a gain of almost 10% compared to 2020 to reach VND 816.1 billion in net income, resulting in an after-tax profit of VND 203.7 billion. , up 34.2%.
VIP Greenport operates in cargo handling, port services, warehousing and coastal freight services.
Analysts at SSI Securities Corporation said that on the stock exchange, the value of seaports and logistics stocks rose 94% in 2021, 60% higher than the market’s benchmark VN index. Of which, MVN jumped 205%, SGP 183%, PHP 72% and VGR 30.7%./.