Losses continue to engulf Vietnam's shipping industry

Having sold head offices and ships, many shipping firms still cannot pay off debts.

VSG closed the year 2018 with another big loss of VND54.2 billion, raising the accumulative loss to VND523.77 billion. This was the ninth consecutive year VSG incurred a loss.

Losses continue to engulf Vietnam's shipping industry

Its short-term debts were VND528 billion higher than short-term assets. Therefore, the audited firm showed doubts about the operation capability of the shipping firm.

VSG’s board of management affirmed that taking a loss is the common situation of shipping firms now, as the shipping fee has been decreasing. Its other business fields, including storehouse and office leasing, could not offset the big loss from shipping activities.

VSG shares, listed on UpCom, now have the price of VND1,400 per share, and there are almost no transactions.

VSG’s board of management affirmed that taking a loss is the common situation of shipping firms now, as the shipping fee has been decreasing. Its other business fields, including storehouse and office leasing, could not offset the big loss from shipping activities.

The high accumulative loss record holder is Vietranschart JSC, or VST with the total loss of VND1.78 trillion, after taking another loss of VND255.2 billion in 2018.


VST shares are priced at VND800 per share on UpCom and it has nearly lost liquidity.

Seagull Shipping Company, or SSG, has reported profit of VND35.7 billion in 2018, the first time after six consecutive years of loss, from the sale of its old head office and the termination of the settlement of debt.

However, even with the profit in 2018, the firm still incurred an accumulative loss of VND45 billion.

SSG is pessimistic about its performance, saying that the fuel price, which accounts for 40 percent of total revenue, is on the rise, which leads to higher transport cost.

Meanwhile, the number of orders is modest, as ships have to navigate with no goods and freight is on the decrease.

 

Therefore, the firm doesn’t intend to build new ships or buy used ships in 2019.

Vietnam Ocean Shipping (VOS) made a post-tax profit of VND17 billion in 2018, twice as much as one year before, but it still incurs a loss of VND792.3 billion, which was even higher than the stockholder equity of VND654.4 billion at the end of 2018.

VOS shares are traded at VND1,570 per share at the HCMC Stock Exchange.

Analysts say that they still cannot see ‘the light at the end of tunnel’. The international and domestic shipping market has been sliding and there is no sign of recovery and stable growth.

The number of waiting ships is still high because of the low demand caused by the US-China trade war, and China’s decrease in demand for iron ore imports.

The sharp fall in soybean and maize imports from the US to China since July 2018 has resulted in declining business for hundreds of Pamanax/Supramax ships.

South Vietnam Container Shipping is pessimistic about business performance in 2019 and plans another loss of VND39.8 percent this year.

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Thanh Lich

 
 
 
 
 
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