Oil tanker company announces big profits

Positive growth

At the end of the first quarter of 2023, the consolidated financial report of PetroVietnam Transportation Corporation (PVTrans) recorded positive growth in production and business results.

Net revenue reached over VND 2,536 billion and consolidated profit before tax was over VND 385 billion, 32% higher than the same period. Profit after corporate income tax recorded an increase of more than 27% over the same period in 2023, at over VND 306 billion.

Doanh nghiệp tàu dầu công bố lãi lớn- Ảnh 1. — Recently, the oil tanker market has improved with high freight rates, helping businesses increase revenue (Illustration photo).

This result is mainly due to PVTrans's increased profits from transportation business due to increasing the number of ships and increasing the efficiency of exploiting the fleet of the corporation and its subsidiaries.

Meanwhile, operating in a "tripod" position with container ships, bulk carriers and oil tankers, Vietnam Maritime Transport Joint Stock Company (Vosco) also received "sweet fruits" thanks to the effective exploitation of the oil tanker fleet. In the first 3 months of 2024, Vosco's revenue reached more than VND 1,112 billion and its after-tax profit reached VND 74.5 billion, a slight increase compared to the same period last year.

According to Vosco representative, although the market for dry cargo and container ships still has many difficulties, the company has closely followed developments and taken advantage of market opportunities. Especially with the oil tanker sector, the company has applied solutions in business operations to increase revenue and improve management and operation efficiency.

Specifically, evaluate, consider and take advantage of the growth of the product oil transportation market. In the first quarter of 2024, the company continued to sign contracts with relatively high freight rates for oil tankers. In addition, the company also had additional revenue from two chemical tankers, Dai Hung and Dai Thanh - two ships chartered as bareboats for 3 years.

Due to the fast turnover, the revenue of oil tankers is quite large. The 5 oil tankers operate effectively, contributing to improving Vosco's overall business results.

However, not all oil tanker businesses are "winning big". VIPCO Petroleum Transport Joint Stock Company's profits declined in the first quarter of 2024 with the parent company's net revenue reaching more than VND 116 billion, down more than 20% over the same period. Profit after corporate income tax decreased by more than 28%, reaching VND 19.3 billion.

According to Vipco's explanation, the transportation revenue in the quarter generated additional revenue from operating external vessels. In addition, 2 vessels stopped for major repairs, so the number of good vessel days decreased compared to the first quarter of 2023, causing the revenue in the first quarter of 2024 to decrease. At the same time, the company operated a vessel outside the company's fleet, so it also increased the cost of capital by 28.8 billion.

At the same time, the two major repair ships also resulted in higher regular repair costs compared to the first quarter of 2023. Financial revenue also decreased due to lower bank interest rates compared to the same period, while business management costs increased insignificantly.

Sharing the same result with VIPCO, Pacific Petroleum Transport Joint Stock Company (PVTrans Pacific) also recorded a decrease in profits in the first 3 months of 2024. Although its net revenue reached more than 373 billion VND, higher than the same period last year, its profit after corporate income tax only reached more than 46 billion VND, a slight decrease of about 1 billion VND compared to the same period in 2023.

The company representative explained that the revenue in the first quarter of 2024 increased because Pacific's fleet continued to operate in the international market with good freight rates. However, profits still decreased due to exchange rate differences and reduced financial revenue, affecting the company's profits.

Promising market

According to experts, in 2024, the liquid transportation market including crude oil and oil products will generally maintain a positive trend thanks to export output in the Atlantic region, stable consumption demand in China as well as a wave of start-ups at refineries.

In addition, Middle East tensions and the Russia-Ukraine conflict continue to be supportive factors as shipping distances and times are extended amid limited ship supply, contributing to increased freight rates.

The LPG transportation market is still forecast to be positive, but freight rates will decrease compared to the peak at the end of 2023. The market supply and demand balance is expected to return to equilibrium when previous supporting factors such as the propane price difference between the US and Asia and the disruption of the Panama Canal gradually reduce their impact.

For bulk shipping, a recovery trend is forecast thanks to a positive supply-demand balance in 2024 thanks to stable Atlantic export volumes… but it is unlikely to return to the record levels of 2021-2022.

With the market prospects, in 2024, PVTrans leaders said the company plans to have revenue of VND 8,800 billion, an increase of 29.4% compared to the 2023 plan; profit after tax of VND 760 billion, an increase of 41.3% compared to the 2023 plan and pay VND 354 billion to the State budget. Of which, the total expected investment capital is VND 3,364 billion, including VND 3,102 billion for ship investment and VND 262 billion for capital contribution to member units.

Regarding the fleet, PVTrans said it will invest 58 million USD in the transfer project from last year to invest in 1 VLGC or 1 Aframax or 2 MR vessels; invest 22 million USD in the transfer project from last year to invest in 1 chemical tanker or 1 bulk carrier; and invest 52 million USD, this is a new investment project in 2024, in 2 MR vessels or 1 Aframax vessel.

According to Vosco's direction, the company will continue to monitor market developments, focus financial resources to search for and hire more ships for exploitation or invest in many forms. At the same time, continue to strengthen management, especially fuel, spare parts, and materials management to reduce consumption, prevent fuel and spare parts loss, and reduce costs.

Source