Vietnam Airlines (VNA) will propose its shareholders the target of VND2.421 trillion ($107.6 million) in consolidated pre-tax profit for the 2018 financial year at the upcoming annual general shareholders’ meeting (AGM).

Most of the business targets that the VNA Board of Directors will propose to shareholders at the AGM on May 10 are much higher than the record-high results achieved in 2017.

Specifically, in 2018 VNA set the target of carrying some 24.3 million passengers and 350,900 tonnes of cargo, increases of 10.9 and 8.2 per cent on-year.

At its overseas market, VNA expects a growth of 10 per cent in market share and maintain its position in international markets, while ensuring business efficiency.

VNA will continue on its course to bring new-generation wide-body vessels to serve European, Australian, and Northeast Asian routes, while at the same time opening new routes for Nha Trang-Seoul, Danang-Busan and Danang-Osaka.

At the local market, VNA will increase its transport load by 10-12 per cent compared to 2017 to maintain the market share of 42-43 per cent. VNA Group’s market share, which includes Jetstar Pacific (JPA) and Vietnam Air Services Company (VASCO), will be kept at 58-59 per cent.

VNA will focus on strengthening coordination with JPA in their dual brand strategy. New routes expected to open include flights from Nha Trang to Phu Quoc and Saigon to Chu Lai.

In 2018, VNA plans to operate on average 92 aircraft. With the addition of two A350s (SLBs) and nine A321-NEOs, together with the early dismissal of rental aircrafts including four ATR72s and three A330s, the total fleet of VNA on hand will add up to 98 units by the end of 2018, continuing leading the market in terms of fleet size and quality.

With its products designed in line with market demand, VNA anticipates to achieve consolidated sales of VND97.073 trillion ($4.314 billion) in 2018, up 13.2 per cent on-year. VNA’s core business line of air freight, meanwhile, is expected to deliver some 10 per cent growth in sales compared to 2017, at VND69.986 trillion ($3.11 billion).

The domestic and international aviation market in 2018 is forecast to face unfavorable fluctuations, including an expected sharp increase in fuel prices at $75-80 a barrel, an increase of 15-20 per cent on-year. In the first quarter of 2018, fuel prices stood at $80 a barrel, some 9.6 per cent higher than expected.

Given the rising fuel prices, production costs will increase significantly, by at least VND2.2 trillion as a result.

Considering the effect of the fuel price hike, VNA targets consolidated pre-tax profit and post-tax profit of $107.6 million and $85.2 million, respectively.

Yet with the positive results achieved in the first quarter (pre-tax profit estimated at VND875 billion ($38.89 million), up 31.7 per cent on-year), together with improved corporate management, the VNA Board of Directors anticipates the 2018 performance to meet and beat 2017.

Looking back at 2017, VNA completed 140,000 absolutely safe flights and transported 22 million passengers. The group’s total revenue reached VND84.962 trillion ($3.78 billion). Pre-tax profit reached a record of VND3.155 trillion ($140.22 million), surpassing 92.6 per cent of the original target and up 21.3 per cent on-year.

The parent company reported VND64.920 trillion ($2.88 billion) in sales and VND1.911 trillion ($84.93 million) in pre-tax profit. Return on equity (ROE) stood at 14.8 per cent, while return on assets (ROA) sat at 2.3 per cent, slightly up from the previous year.

Listed on the UpCom since January 3, 2017 under the ticker HVN, VNA has constantly been in the top 20 companies leading the stock market in terms of market capitalisation. By the end of 2017 VNA’s market capitalisation reached $2.4 billion, up 50 per cent on-year, with earnings per share (EPS) staying at VND1,931 ($0.08) a share, an increase of 14.6 per cent on-year.

VIR