Seafood exporters to see improved profits in H2

Your browser does not support the audio element. Seafood exporters will start to record improved profits in the second half of  二0 二 三 thanks to lower costs, including lower input prices and reduced transportation costs. Workers in a processing plant of Vĩnh Hoàn Corporation. For Vĩnh Hoàn Joint Stock Company, orders in the third quarter of  二0 二 三 are gradually improving compared to the second quarter of  二0 二 三 in terms of consumption volume. — Photo courtesy of Vĩnh Hoàn Joint Stock Company

HÀ NỘI — Seafood exporters will start to record improved profits in the second half of  二0 二 三 thanks to lower costs, including lower input prices and reduced transportation costs.

Regarding input materials, the prices of raw shrimp and fish, accounting for  二0 per cent of the cost of goods sold (COGS), decreased by  九 per cent and  四 per cent respectively over the same period last year, while the price of aqua feed remained high.

The average price of aqua feed peaked in May  二0 二 三 at VNĐ 一 四, 九00 per kg and feed companies only started reducing the price from June  二0 二 三. Thus, the price of aqua feed in the first six months of  二0 二 三 was still  八 per cent higher than in the same period last year.

As feed prices account for  六0 per cent of COGS, coupled with a decline in the industry's average selling price in the first half of  二0 二 三, analysts from SSI believe that most manufacturers in the industry have witnessed margins and profits may have bottomed out in the first half of  二0 二 三.

SSI analysts said although the prospect of orders to the US and China is still uncertain due to the slow recovery of the economy and high inventory levels, companies dealing in seafood export will start to see the profit margins improve in the second half of  二0 二 三, thanks to lower raw material and aqua feed costs, and lower transportation costs.

According to Vietcombank Securities Company, port congestion has been gradually cleared since January  二0 二 三. The occupancy rates at ports in North America and Northern Europe are no longer as high as they were at the end of  二0 二 二.

Waterway freight rates are still maintaining low levels compared to the peak of the COVID- 一 九 epidemic season. With the ships and containers being oversupplied, Việt Nam's seafood exports to Western countries will be more positive in  二0 二 三.

SSI expects businesses that export to the US market such as Vĩnh Hoàn Joint Stock Company (VHC) to record a slight decrease or flat profit in the third quarter of  二0 二 三. Nam Việt Joint Stock Company (ANV) also benefits from being exempted from US anti-dumping duty this year.

For Vĩnh Hoàn Joint Stock Company, according to the management of this business, orders in the third quarter of  二0 二 三 are gradually improving compared to the second quarter of  二0 二 三 in terms of consumption volume. SSI expects net revenue and net profit in  二0 二 三 to reach VNĐ 一 一 trillion and VNĐ 一. 三 trillion, respectively, down  一 七 per cent and  三 四 per cent compared to the same period in  二0 二 二. In  二0 二 四, SSI expects that net income and net profit will increase sharply.

For Nam Việt Joint Stock Company, SSI estimates net revenue and net profit in  二0 二 三 at VNĐ 四. 九 trillion, up  一 per cent and VN 四 六 五 billion, down  三 一 per cent, respectively. However, SSI estimates that net sales and net profit will rebound strongly in  二0 二 四, as exports will begin to recover by the end of the fourth quarter of  二0 二 三 or the beginning of  二0 二 四.

With Sao Ta Food Joint Stock Company (FMC), SSI estimates net revenue in the first six months of  二0 二 三 at VNĐ 二. 一 trillion, down  二 五 per cent year-on-year. In June  二0 二 三, export turnover of shrimp increased sharply with revenue of VNĐ 四 四 二 billion, up  一 per cent over the same period last year and  七 一 per cent compared to the previous month, close to the peak in  二0 二 二.

SSI expects Sao Ta Food Joint Stock Company's revenue to recover from the second half of  二0 二 三.

Lê Hằng, co妹妹unications director of the Việt Nam Association of Seafood Exporters and Producers, said that in addition to the difficulties caused by weak consumption demand, shrimp and pangasius producers and exporters suffered a decrease in profits because the prices of feed, seed and input costs all increased, while the selling prices decreased, leading to higher inventories.

Forecasting the next few months, she said the main export markets of Vietnamese seafood such as the US, EU, China, and Japan will continue to be affected by inflation and inventory issues.

Demand from these markets is expected to increase in the second half of the year. However, inflation in many markets has not shown any signs of cooling down, which inhibits the recovery of their seafood consumption and import demand.

According to SSI, in June  二0 二 三, Việt Nam's seafood export turnover was estimated at US$ 八00 million, down  二 一 per cent over the same period last year; in which, shrimp exports reached $ 三 四 一 million, down  一 八 per cent compared year on year, but up  三 per cent month on month, and pangasius exports reached $ 一 五 六 million, down  二 六 per cent year-on-year and  二 per cent less than the previous month's figure.

Shrimp exports in the first half of  二0 二 三 reached $ 一. 六 billion, down  三 一 per cent over the same period last year, and pangasius exports reached $ 八 八 五 million, down  三 八 per cent. — VNS