Vinalines gradually finding feet

After years of continuous losses, Vietnam's largest state-owned shipping company Vinalines recorded a consolidated profit reaching the break-even point in 2016, amid the global shipping sector’s extreme difficulties.

The giant earned a pre-tax profit of VND923 billion ($41.95 million) and VND1.139 trillion ($51.77 million) in port operation and maritime services and others in 2016, while incurring a loss of VND1.98 trillion ($90 million) from its shipping business line, said acting CEO Nguyen Canh Tinh at last week's year-end review meeting.

The Vinalines holding company gained a pre-tax profit of VND340 billion ($15.45 million) during the year, up 4 per cent on-year, he added. 

With these positive results, the firm was taken off the list of state-owned enterprises (SOEs) operating at a loss in 2016. In 2015, it was also not on this list with a consolidated pre-tax profit of VND66 trillion ($3.14 million).

Between 2011 and 2014 Vinalines often topped the list of SOEs in the red. In particular, it suffered a loss of over VND3.4 trillion ($155 million) in 2014.

Last year, the firm made an estimated consolidated revenue of VND16.01 trillion ($727.7 million), down 10 per cent on-year and equivalent to 94 per cent of the annual target.

Of the sum, over VND4.7 trillion ($213.6 million) came from port operation, VND4.3 trillion ($195.45 million) from the shipping business, and VND7.4 trillion ($336.36 million) from maritime services and others.

Tinh blamed the ailing revenue on the strong drop in fees driven by the plunging global shipping market, with the Baltic Dry Index (BDI) falling to nearly 240 points.

2016 was a year of extreme difficulties for the global shipping business. Drewry, a leading international provider of research and consulting services to the maritime and shipping industries, forecast that the global shipping business could suffer a loss of $5 billion. 

The world's leading shipping lines, including Maersk Lines, Nippon Yusen Kabushiki Kaisha (NYK Line), German Hapag-Lloyd, Israeli Zim, French CMA CGM, Mitsui OSK Lines (MOL), and Kawasaki Kisen Kaisha (K Line), all incurred big losses. Meanwhile, many others were forced to merge to survive.   

While the shipping business faced difficulties last year, port operation marked a significant growth milestone. 

The volume of goods shipped via Vinalines' ports reached over 78 million tonnes, up 17 per cent on-year, of which container throughput amounted to 3.45 million TEUs, up 22 per cent, while pre-tax profit rose by 58 per cent on-year. 

In 2017, Vinalines will aim to reach a consolidated revenue of VND11.5 trillion ($522.7 million), of which VND4.36 trillion ($198.18 million) would come from port operation, VND2.12 trillion ($96.36 million) from shipping business, and VND5 trillion ($227.27 million) from maritime services and others.

The firm also targets to reach at least a break-even profit this year.

By Bich Thuy