What makes Hai Phong port so profitable?

Hai Phong Port posts record profits despite decline in core business. Photo: Hai Phong Port Joint Stock Company

Core business decline

According to the first quarter 2024 financial statements, Hai Phong Port Joint Stock Company (Stock code: PHP) recorded consolidated net revenue of VND 566 billion, up 12.5%. After deducting cost of goods sold, gross profit reached VND 216 billion, up 16% over the same period last year. After accounting for expenses, Hai Phong Port reported a first quarter profit of VND 179 billion, down 14.7% over the same period last year.

Previously, in 2023, PHP's net revenue reached VND2,157 billion, down more than 8% compared to 2022. In contrast, financial revenue increased by 13%, to VND218 billion, while financial expenses halved, to VND9 billion.

The company also recorded other profits for the year reaching nearly 90 billion VND, 5.1 times higher than the previous year; other income reached 140 billion VND, 7 times higher than the previous year, mainly coming from compensation for a crane damaged by a collision with a foreign ship.

Hai Phong Port's record profit in 2023 is mainly due to other income of more than VND140 billion.

In 2023, PHP reported pre-tax profit of VND915 billion and after-tax profit of VND746 billion, up 3% over the previous year. This is also the highest profit the company has achieved since going public in 2015.

Looking at the overall business picture of Hai Phong Port, it can be seen that the core business of the enterprise is less positive. The company recorded high profits and growth thanks to other income, other profits and financial revenue.

Cash down 11% in 3 months

As of March 31, 2024, Hai Phong Port's total assets reached VND 7,097 billion, an insignificant change compared to the beginning of the year. Of which, cash and cash equivalents and term deposits reached VND 1,930 billion, down nearly 11% compared to the beginning of the year. Previously, at the end of 2023, this item also decreased sharply by 30% compared to the beginning of the year.

Cash and cash equivalents, deposits of Hai Phong Port continued to decrease sharply in the first 3 months of the year. Screenshot of HPH financial statements

Customer receivables reached VND289 billion, up 16.8%. Of which, the largest proportion is receivables from SITC Container Lines Co.LTD (VND45.8 billion); Maersk A/S (VND26.5 billion); Wan hai lines ltd (VND18.2 billion); VTB International Agency and Brokerage Co., Ltd (VND16.6 billion).

Other receivables were at VND236.6 billion, down 10.4% compared to the beginning of the year; in which, mainly short-term receivables were VND236.5 billion.

An item that accounts for a large proportion in the asset structure of Hai Phong Port is long-term unfinished assets with 1,848 billion VND, an increase of 14% compared to the beginning of the year. Mainly the value of unfinished basic construction at Project 02 container terminals No. 3,4 Lach Huyen Gateway Port with 1,845 billion VND, the figure at the beginning of the year was 1,618 billion VND.

Fixed assets were at VND1,947 billion, down 1.4% compared to the beginning of the year; long-term financial investments reached VND335 billion, up 6%. Of which, investments in joint ventures and associates were VND319 billion; capital contributions to other entities were VND17 billion. The company made provisions for a decrease in the value of long-term investments of VND1 billion.

Bad debt of 36 billion VND

Notably, Hai Phong Port has a bad debt of more than 36 billion VND, the company has set aside a risk provision of 35.5 billion VND for this debt. Of which, mainly debts overdue for more than 3 years, at 34.8 billion VND, Hai Phong Port has set aside a provision of 34.8 billion VND, equivalent to 100% of the debt value; the rest are debts overdue from 2 years to less than 3 years, debts overdue from 1 year to less than 2 years, totaling more than 1.2 billion VND.

Hai Phong Port makes 100% provision for debts overdue for more than 3 years. Screenshot of HPH financial statements

As of March 31, 2024, the debt payable at Hai Phong Port was VND 1,183 billion, down 12% compared to the beginning of the year. Of which, the loan debt was VND 520 billion, down 3.7% compared to the beginning of the year. The company has a long-term debt due for payment of more than VND 24 billion, this is a Phase II ODA loan.

Equity increased by 3.1%, reaching VND5,914 billion, of which VND984 billion was undistributed profit after tax.

Source: https://laodong.vn/kinh-doanh/mang-kinh-doanh-cot-loi-suy-giam-cang-hai-phong-lai-cao-nho-dau-1325427.ldo