Vinalines earns profits three years after restructuring

Vinalines expects to reduce the company's outstanding loan to VND3.2 trillion before equitisation and to VND1.8 trillion by the end of 2016. - Photo cafef.vn

According to acting general director of Vinalines Nguyen Canh Tinh, the corporation earned a syndicated profit of more than VND40 billion ($179,131) in 2015.

He said the profit was meaningful considering the fact that the sea transport market had become worse with lack of orders and decreased freight in comparison to 2014, which used to have the lowest freight level since the Baltic Dry Index (BDI), an economic indicator issued daily by the London-based Baltic Exchange.

Although faced with difficulties in finance and vessels which had been used over the years, Vinalines businesses paid much attention to the quality of technical management work, safety of the fleet and tightened management on fuel in order to obtain better results in business and production.

With the restructuring plan, which focuses on three key areas including sea transport, sea port exploitation and maritime services, Vinalines has regularly resolved its difficulties, creating development stability.

Enterprise Management Department director Vu Anh Minh said the ministry would launch an initial public offering of Vinalines, the parent company, in the first quarter of this year. At the same time, it would also complete the conversion of the parent company's business into an equitisation company model.

Minh said it expected to reduce the company's outstanding loan to VND3.2 trillion before equitisation and to VND1.8 trillion by the end of 2016.

Chairman of Vinalines Le Anh Son said the parent company's current outstanding loan was nearly VND6.2 trillion, a 46 per cent drop over that in December 31, 2013.

Son said Vinalines had taken measures to reduce its outstanding loan through measures such as implementing purchases of debts through the Debt and Asset Trading Corporation, and converting loans into shares, or contribution of capital in the parent company and a number of its member companies.

The restructuring to reduce the loan was not only part of the corporate restructuring target, but also meant for its survival in the future, Son said.

As the government required, Vinalines' outstanding loan should be at an acceptable level at round VND3 trillion.

Deputy Minister of Transport Nguyen Van Cong said that with the support from the ministries and sectors and effort from Vinalines, the corporation had conducted its various businesses and overcome its difficulties.

However, he said that the sea transport situation would continue to be difficult this year, before its predicted recovery in 2017, and the corporation needed to seek every way to reach its set business targets.

As for Vinalines equitisation results in 2015, Tinh said the corporation had completed equitisation of its five businesses which included the ports of Nghe Tinh, Can Tho, Nam Can, and Cam Ranh, in addition to Sai Gon, bringing total equitised businesses to 12, completing its set target in the restructuring plan.

Of the ports, Nha Trang, Hai Phong and Cam Ranh have registered transactions and are listed on the stock market.

In 2015, Vinalines also completed its divestment of 17 businesses, bringing the number of divested businesses to 37 by the end of 2015. The corporation has planned this year to divest from 15 more businesses.

The corporation has set a target of transporting 22.5 million tonnes of goods this year, unloading about 64.5 million tonnes at ports, and hoping to earn VND19 trillion in revenue and VND126 billion in profits.