The State-run Vietnam Shipbuilding Industry Corporation (SBIC) said in its first-half production and business report that the holding company may incur a net loss of more than VND2.8 trillion (US$124 million) in all of 2018.

Pha Rung Shipyard Co Ltd, a subsidiary of the State-run shipbuilder SBIC, hands over to South Korea’s BS Tankers and Yentec a 6,500-DWT oil and chemical tanker called “YN YEOSU” in the northern port city of Haiphong on May 31, 2018 – PHOTO: SBIC

SBIC noted that its holding company made a mere VND249 billion (US$10.6 million) in consolidated revenue and other income in the first half of this year, well below VND740 billion (US$31.7 million) in the year-earlier period, while meeting only 10.5% of the full-year target.

Of the VND249 billion, revenue from financial activities was over VND242 billion, while earnings from business and service activities stood at a mere VND6 billion.

Meanwhile, SBIC’s eight subsidiaries earned VND1,359 billion (US$58.3 million) in revenue and other incomes, meeting 35% of the full-year target.

Given the gloomy business picture, SBIC forecast that its holding company may incur a pre-tax loss of over VND2.8 trillion (US$124 million) this year, while its revenue is estimated at VND2.32 trillion, including VND2.29 trillion from financial activities.

Currently, the corporation owes VND81.7 billion in salaries and VND316 billion in social insurance premiums. As of late July, as many as 600 employees had left the firm.

An SBIC leader told local media that the world’s shipping and shipbuilding market has been suffering, and there has been no sign of a recovery, due to the instability of the global economy and the transport overcapacity.

The executive said that freight transport rates in the market will put increasing pressure on local and international shipowners, making them reluctant to invest in new ships.

SBIC proposed the Transport Ministry allow it to build various kinds of ships, such as fishing vessels, cruise ships, and others for the Vietnam Maritime Administration and the Vietnam National Oil and Gas Group.

SBIC, formerly known as Vietnam Shipbuilding Industry Group (Vinashin), was established in 1996. After a long period of hefty losses, the Government approved a restructuring scheme for Vinashin in July 2013. It was not until October that year that the Transport Ministry set up SBIC on the basis of reorganizing it and its subsidiaries.

SGT