Vinh Hoan (VHC) has released its financial report showing post-tax profit down 56 percent in the third quarter 2023 compared with the same period last year to VND200 billion. Its profit decreased by half to VND883 billion in the first nine months of the year.

Prior to that, Vinh Hoan asked for permission to delay the third quarter financial report submission as the company had to receive inspectors from the US Department of Commerce in late October that served the 19th administrative review over frozen catfish fillet. However, the watchdog agency rejected the proposal.

A high number of seafood companies reported profit decreases, which is in contrast to expectations for the increase in exports to the US in the high sale season and reported retail inventory decreases.

I.D.I (IDI) reported that its post-tax profit in the third quarter dropped 77 percent to VND23 billion compared with the same period last and 15 percent compared with the second quarter, while revenue dropped 11 percent to VND1.749 trillion.

IDI’s GPM (gross profit margin) decreased sharply to 6 percent in the third quarter (the figures were 11 percent in the third quarter 2022 and 8 percent in the second quarter this year). 

Camimex (CMX) has reported a 74 percent fall in post-tax profit to VND8.8 billion in the third quarter as the net revenue dropped 34 percent to VND538 billion. Meanwhile, Nam Viet’s (ANV) profit plummeted by 99 percent from VND120 billion to VND1 billion and its net revenue decreased by 11 percent to VND1.099 trillion.

Minh Phu Seafood (MPC) even took a loss of VND26 billion (it made a profit of VND332 billion the same period last year) and saw the revenue drop 41 percent to below VND3 trillion.

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), catfish export turnover in the first nine months dropped 30.7 percent, while seafood export turnover fell 22 percent.

Prior to that, analysts all predicted that seafood companies would have satisfactory business performance in the two last quarters of the year thanks to demand recovery in many target markets in the year-end sale season.

Exports to the US were expected to increase as the Vietnam-US relationship has been upgraded to comprehensive strategic partner, while China was believed to increase imports from Vietnam.

Investors, therefore, put high hopes on seafood shares. But contrary to their expectations, MPC share prices dropped from VND20,000 per share to VND17,000, and VHC from VND80,000 to VND70,000.

Explaining decreases in export turnover and profit, Vinh Hoan’s CEO Nguyen Ngo Vi Tam attributed it to the output and selling price decreases.

Vinh Hoan’s revenue fell by 19 percent in the third quarter from the same period last year to VND2.7 trillion, and by 30 percent to VND7.68 trillion, while its cost prices maintained at high levels. As a result, revenue has decreased despite positive signs from Chinese and European markets.

Vinh Hoan’s exports to the US dropped 59 percent in October compared with the same period last year, while domestic sales dropped 14 percent. However, its exports to China rose by 43 percent and exports to Europe rose by 20 percent.

As for Minh Phu Seafood, the company of ‘Shrimp King’ Le Van Quang and his wife Chi Thi Binh, net revenue in the first nine months of the year was VND7.466 trillion, down 46 percent compared with the same period last year.

The problem that all seafood are facing is a lack of materials, causing seafood processors to delay signing new contracts.

Analysts say that business results in the first nine months of the year were disappointing. 

Shrimp exports to the US witnessed strong growth after the US and Vietnam set a comprehensive partnership in 2013, so the upgrading to a comprehensive strategic partnership in 2023 is hoped to give a push to Vietnam’s exports to the world’s largest economy. The high hopes are fueled by signs of inflation in the US cooling down.

VASEP is optimistic about exports in the fourth quarter of the year after seeing signs of recovery in September.

Manh Ha