Summary of the 2020 9M results of Vietnam Container Ship. (VSC VN)
9M/2020 results highlights:
- VSC posted a net revenue of VND1,230bn in 9M/2020, down 9.2% y/y mainly due to lower port throughput volume in the reporting period. Operating margin and EBITDA margins improved somewhat thanks to the restructured operation cost and investment in new in-house equipment. Net profit climbed by 19.0% y/y to VND177bn as there was not any one-off expenses and extraordinary income tax expense compared with the same period last year.
- VSC has paid all debts and maintain a cash and cash equivalent amount of VND477bn, accounting for 19.3% total assets by the end September 2020.
- In August and September 2020, VSC has signed contracts to serve three new shipping services per week, thus increasing the number of vessels coming to its ports to about 16-17 vessels/week. Such a result is highly positive as the company can attract vessels amid the pandemic. We expect these new vessels to add significant volume to the company in the coming quarters.
- The United Nation Conference on Trade and Development (UNCTAD) estimated the Q3/2020’s global trade to continue to decline by 4.5% y/y, a lower rate than Q2 (19.0% y/y). The UNCTAD expects that Q4/2020 performance will remain negative due to the possibility of a resurgence of Covid-19. Accordingly, global trade should fall by 7% y/y in 2020. As for Vietnam, the trade activities looked more positive than the global number. In October, Vietnam reported about 10% y/y growth in import and export value, we think that the positive growth in trade value should maintain for the rest of the year, and such development will be positive for port operators in Vietnam
- We expect VSC’s bottom line to grow 6.8% y/y to VND250bn in 2020. In 2021, we expect net profit to grow by 14.0% y/y to VND285bn thanks to the recovery in port volume and the improvement in profitability. These numbers are unchanged compared to our last forecast.
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