Increased travel demand and better cost reduction have helped Hanoi Railway and Saigon Railway achieve their highest profits in many years.
According to recent financial reports, Hanoi Railway Transport Joint Stock Company (HRT) had revenue of approximately VND 2,460 billion, an increase of over 6% compared to the same period last year. Peak revenue was recorded in the first and third quarters. In addition, financial income increased nearly threefold to approximately VND 11 billion.
Over the past year, HRT has reduced its business management costs, financial costs, and other expenses. In total, the company earned a net profit of over 14 billion VND after tax, a 2.4-fold increase compared to 2022. This is the highest level since 2016. HRT is still more than 3% short of its revenue target but has exceeded its full-year profit plan by 2.4 times.
Positive business results were also recorded at Saigon Railway Transport Joint Stock Company (SRT). Revenue reached nearly VND 1,700 billion, an increase of nearly 9% compared to 2022. Similar to HRT, the peak revenue was also in the first and third quarters. Thanks to slower cost of goods sold, gross profit improved.
After deducting expenses, SRT earned nearly 11 billion VND in after-tax profit, a 27-fold increase. This is the company's highest profit level in the past four years. The company is still about 3% short of its revenue target but has already exceeded its full-year profit plan by 18 times.
Saigon Railways stated that in 2023, the demand for travel from domestic and international passengers increased significantly, especially during the Lunar New Year and summer. These two peak periods fell in the first and third quarters, which also contributed the most revenue and profit to both businesses.
Despite being profitable for the entire year, HRT and SRT incurred losses of nearly 84 billion VND and nearly 70 billion VND respectively in the last quarter, mainly due to the cost of repairing train carriages. Hanoi Railway stated that the increased demand for carriages led to a 40% increase in the number of carriages requiring repair compared to the same period last year. The company had to send more than 360 carriages to the workshop at a cost of over 18 billion VND.
Saigon Railway also stated that in the last quarter of 2023, it focused on repairing train cars to prepare for operation during the upcoming peak Tet holiday season. In addition, the company had to make provisions for doubtful receivables and allocate funds to the salary reserve.
Passengers arriving at Saigon Station (District 3), October 2021. Photo: Quynh Tran
Hanoi Railway and Saigon Railway are the largest members of the Vietnam Railway Corporation (VNR). HRT manages routes from Hanoi to Ho Chi Minh City, Lao Cai, Dong Dang, Hai Phong, and two routes: Yen Vien - Quan Trieu and Kep - Cai Lan. The company also organizes international passenger and freight transport through the Ha Khau and Huu Nghi border gates. The company states that it owns 600 passenger carriages, 3,300 freight carriages, and employs 5,000 people.
SRT manages routes from Ho Chi Minh City to Hanoi, Nha Trang, Tuy Hoa, Da Nang, Hue, Vinh, Lao Cai, Hai Phong, Lang Son, etc. The company also operates tours to scenic spots. In addition, SRT owns business locations at major train stations nationwide, including Song Than, Saigon, Nha Trang, Da Nang, Giap Bat, Hanoi, Lao Cai, and Dong Dang.
Previously, both HRT and SRT experienced periods of continuous business losses. Besides the impact of the pandemic, Hanoi Railway also acknowledged that the service attitude of its staff did not meet customer requirements, especially among older workers, and that there were instances of "guaranteeing passengers" and "guaranteeing goods," and that trains lacked Wi-Fi.
Meanwhile, Saigon Railway acknowledges that their ticket prices are high, making them uncompetitive, their service quality does not meet customer expectations, and their transportation vehicles are outdated.
Tat Dat
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