Despite Covid-19, many logistics enterprises overcome difficulties

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The logistics industry not only recorded the gray areas but also occupied more market share. Photo: Thai Binh

Solve difficultiesto look for golden opportunities

Canceled orders, containers at the port, closed borders.These are some of the many difficulties that logistics enterprises have to face amid the pandemic.

However, contrary to the difficulties of Covid-19, many logistics enterprises have been successful thanks to their capabilities and smart strategies, taking advantage of their strengths, dominating market share and confirming their position.

In the first half of 2020, Vinalink Logistics Joint Stock Company recorded a 33.24% increase in consolidated net revenue with a turnover of more than VND602 billion, so the profit after tax of the business had a growth of more than 31% (more than VND15 billion). Compared to the same period in 2019, the consolidated net revenue of the company has increased by more than VND150 billion.

The consolidated profit after tax has also increased by nearly VND3.6 billion (up 31.28%). In 2020, Vinalink sets the total revenue target of VND850 billion and pre-tax profit of VND20 billion. At the end of the second quarter, Vinalink recorded total assets of nearly VND396 billion, up 16% compared to the beginning of the year. These are quite impressive numbers for a logistics enterprise during the Covid-19 pandemic, which is still having a strong impact on the logistics industry.

As a giant in the logistics industry, Gemadept Joint Stock Company (GMD) has just announced consolidated financial statements for the first seven months of the year with net revenue of VND1,416 billion, pre-tax profit of VND348 billion and after-tax profit. Parent company shareholders are VND260 billion. For the logistics sector, the accumulated profit after tax in the first half of the year grew 144% over the same period. In which, some member units have impressive business results, such as Mekong Logistics, profit before tax exceeded 8% of the plan.

Notably, despite being affected by the Covid-19 pandemic, in the second quarter, CJ GMD Logistics officially operated the first distribution center in Da Nang. This is one of many projects in the strategy to expand the network and scale of logistics activities in 2020.

Also having positive results, in the first six months of 2020, net revenue of Hai An Transportation and Handling Joint Stock Company reached VND541.8 billion, of which shipping is the main growth driver of the business with revenue reaching VND434.0 billion, up 7.7%. In the first half of 2020, HAH has made 128 domestic and international trains, up 25.5%, thanks to the full-time operation of HAIAN MIND (the first half of 2019 only operates from June) and is supported stable source of goods from customers.

Opportunities for restructuring business

Assessing the reason for the above positive results, Mr. Nguyen Nam Tien, Vice Chairman of the Board of Directors and General Director of Vinalink, said that Covid-19 interrupted freight forwarding activities, causing freight rates to increase from 3 to 4 times. The net revenue of the company increased mainly due to the impact of the Covid-19 pandemic which caused the cost of air freight to rise. Profit after tax increased mainly due to increased international shipping services by sea and support services.

Vice Chairman of the Board of Directors and General Director of Vinalink said that Covid-19 also creates opportunities. Vinalink has had other opportunities such as the aviation segment in recent months, the company is exploiting more medical services and having good results in the short term. Exporting 80-90 tons of medical services to Europe has helped offset other areas affected by the pandemic.

The Vietnam Container Joint Stock Company (Viconship) also recorded a profit after corporate income tax in the first six months of the year reaching VND113 billion, an increase of more than VND29.7 billion (equivalent to 36%) compared to the same period in 2019.

According to Mr. Nguyen Van Tien, General Director of Viconship, in the first six months of the year, thanks to promoting the application of information technology in production and business activities as well as the reduction of ships having to move to external ports, it has contributed to saving and minimizing spending on production and business fees of the enterprise.

In addition, interest payable to banks in the first six months of 2020 has decreased significantly compared to the same period last year (down nearly VND 9 billion) because Viconship has paid off most of the bank loans, which is also the main reason for the benefit. Viconship’s six months' EAT increased by VND29.7 billion, corresponding to an increase of 36% over the same period last year.

Commenting on the company's operations in 2020, Hai An Transportation and Handling Joint Stock Company (HAH) said that Covid-19 may be an opportunity to promote economic restructuring with policies for more sustainable and long-term development, avoiding too much dependence on China, which are a good opportunity to assert the position of the business.

However, 2020 is still a difficult year for the seaport market in Hai Phong due to the excess supply of seaports and the trend of shifting downstream of the river by major shipping lines.

Transportation activities will also be very difficult due to the use of low sulfur fuel (less than 0.5%) with very high unit price (expected average price is US$550 / ton) increase about 30%.

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Because of both the above difficulties and advantages, in 2020 Hai An Transportation and Handling Joint Stock Company sets a business target in 2020 with an estimated revenue of VND1,370 billion, an increase of 21% compared to 2019, profit after tax is VND 120 billion, equivalent to the performance of last year. In particular, to complete the logistics service chain including shipping, seaports,and warehouses, in the second quarter, HAH completed the second phase of investment in Pan Hai An Logistics Center (with a total area of 15.4 hectares). This will help HAH assert its position in the logistics industry as well as complete its future intentions.