Two largest airports bear losses of smaller ones

Tan Son Nhat International Airport in HCM City at night. - Photo vietnamairport.vn

Speaking at a conference held in Ha Noi recently to introduce to investors its operations and plans before launching the IPOs in December, General Director of Airports Corporation of Viet Nam Le Manh Hung said of the total 22 airports managed by the ACV, only the operation at the Noi Bai and Tan Son Nhat airports were in profit, while all the others were running in losses, according to auditing results in 2014.

The small airports had weak financial results due to the lack of visitors and poor operations.

Chu Lai Airport in central Quang Nam province is one such example. It was designed to receive 500,000 passengers per year but it managed just over 8 per cent of that, making VND3.57 billion (US$159,000) in revenues last year. Meanwhile, Can Tho international airport could fill more than 15 per cent of its designed capacity of 2 million passengers – earning VND34 billion ($1.51 million) in revenue. Other airports including Cà Mau, Rạch Giá, Tuy Hia, and Điện Biên, in addition to Đồng Hới, Liên Khương and Phú Quốc, only managed between 11 per cent and 37 per cent of capacity.

Hung said that almost all of ACV's small airports had been developing infrastructure and expanding investment so they needed more time to recoup their expenses.

A number of other airports such as Da Nang, Cat Bi and Phu Bai were trying their best to restructure operations and were on their way to recovery. Meanwhile, Noi Bai and Tan Son Nhat had made great contributions to the corporation's revenue and profit in the past, Hung said.

Tan Son Nhat International Airport reached 111 per cent of its operation capacity, earning nearly VND3.6 trillion ($160.34 million) and contributing 45 per cent of the ACV's sale revenue and service supply. It received more than 22 million passengers in 2014.

Meanwhile, Noi Bai International Airport carried more than 14 million passengers, bringing about VND2.5 trillion ($111.36 million) in revenue last year. After its international terminal T2 began operations by the end of last year, the airport reached 57 per cent of its capacity.

ACV has been managing 22 civil airports nationwide, of which seven international ones were designed to receive nearly 70 million passengers per year. In 2014, the corporation's revenue gained VND10.56 trillion ($470.38 million) and an after-tax profit of VND2.43 trillion ($108.24 million).

BSC Securities Company has predicted that the ACV would earn a net revenue of VND10.13 trillion ($451.22 million) this year, with an after-tax profit of more than VND1.7 trillion. Its growth rate in revenue and profit in 2015 and 2020 would be 7 per cent and 9 per cent, respectively.

The corporation is seeking to sell a 3.47 per cent stake, equivalent to over 78 million shares, to the public at the initial offering price of VND11,800 (53 cents) a share.

After the IPO, the government will hold 75 per cent of ACV's charter capital while a one-fifth stake is for a yet-to-be decided strategic investor. The remaining 1.53 per cent will be offered to employees and the trade union.