Vietnam National Shipping Lines (Vinalines) reported a fall in losses last year thanks to positive cash flow from its shipping business operations which used to cause huge losses for the State-owned corporation.

A Vinalines container vessel is seen at a local port in this file photo. Vinalines reported a fall in losses last year thanks to positive cash flow from shipping operations.

Vinalines credited the business improvements to the restructuring of debts and operations.

At a review meeting in Hanoi last week, Vinalines general director Le Anh Son said that with last year’s revenue of over VND19.8 trillion, Vinalines still racked up losses of around VND1.63 trillion, or 23% of the 2013 losses which were put at VND7.061 trillion.

Vinalines currently has 109 ships with a total capacity of 2.28 million DWT, accounting for 31% of the country’s total. Ships of Falcon and Vinashinlines are not taken in account as the two firms are taking bankruptcy proceedings.

As the shipping market was still in difficulty last year, shipping lines were seeking to cut losses and costs, and find new markets, resulting in positive cash flow.

Besides, shipping firms of Vinalines are rescheduling loans, upgrading their fleet to reduce debt repayment pressure, reviewing the operations of ships and selling vessels to reduce losses.

Though shipping business has slightly improved, most ships of Vinalines are old, with 49% of them more than 15 years old and 21% of them over 20 years old. 

Last year, Vinalines focused on equitizing and selling State capital at many ports. Ports in the northern region face tough competition. Although the ports in the central region are mainly small, cargo throughput grew well last year as competition is not as strong as in the northern and southern regions.

In the south, Saigon Port is being relocated, so cargo throughout did not change much. After a merger, Can Tho Port attracted more customers and handled higher cargo volume than in 2013.

The terminals at the Cai Mep-Thi Vai port complex reported lower-than-expected throughput last year due to increasingly strong competition.

Vinalines does not set a higher growth target this year. It projected the year’s revenue to decline by 6% to around VND18.5 trillion as the shipping volume and revenue are forecast to continue falling.

Shipping lines are planning to sell old, poor-performing ships this year. The total shipping capacity of Vinalines will drop from 2.28 million DWT to over two million DWT this year based on plans to sell ships.