PVT Logistics sets $3.3 million profit target, eyes move to HSX

April 26, 2024 | 16:53
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PVT Logistics is set to transition from the Unlisted Public Company Market (UPCoM) to the Ho Chi Minh Stock Exchange (HSX) by the end of 2024, aiming to enhance its market visibility and attract further investments, while also planning a capital increase of $9.58 million to fund fleet expansion and improve operational efficiencies.
PVT Logistics sets $3.3 million profit target, eyes move to HSX

At its AGM on April 24, PVT Logistics, a subsidiary of PVTrans Holdings, outlined ambitious financial goals for the upcoming years.

According to Ho Si Thuan, PVT logistics director, the ongoing conflicts in Eastern Europe and the Middle East have paradoxically boosted the demand for maritime bulk liquid transport, despite broader economic disruptions.

For the fiscal year 2024, the company has forecasted a 12.1 per cent increase in its revenue to roughly $52.08 million, with pre-tax profits expected to stabilise at about $3.33 million. Shareholders are also projected to receive a 10 per cent dividend in cash. By 2025, PVT Logistics aims to surge its total revenue to $233.45 million, bolstering its registered capital to $30.83 million.

Reflecting on 2023, PVT Logistics surpassed its revenue targets, pulling in $46.46 million, or 106 per cent of its goal, and a pre-tax profit of $3.34 million – 146 per cent of the planned figure.

Looking ahead, Thuan detailed the company's strategy for 2024, which includes a capital increase of $9.58 million to seize fleet expansion opportunities at optimal market prices. This move is expected to enhance the firm's transportation capabilities and competitiveness. PVT Logistics is also preparing for a strategic transition from the UPCoM to the HSX, a move initially planned for 2023.

"The progression to the HSX listing has been set since last year, but due to slower-than-expected capital increases, we will continue the process after completing these financial enhancements. We expect to finalise the funding by the end of July 2024 and will then submit our application," explained Thuan.

PVT Logistics sets $3.3 million profit target, eyes move to HSX
Nguyen Hoai Phuong, a board member of PVT Logistics and representative of major shareholder Tan Long Company

The company has already met all necessary conditions for the listing, including profitability and shareholder structure requirements. "We anticipate completing the exchange transition by the end of 2024, but if unforeseen delays occur, the move could be postponed to the beginning of the first quarter of 2025," Thuan added.

On the other hand, PVT Logistics remains dedicated to optimising its commercial operations and logistics services while maintaining robust capital management.

The firm also aims to elevate its Maritime Human Resources Training Center, PVTrans, to boost the quality and quantity of its seafaring personnel, supporting fleet operations and potential export activities.

In terms of investment, the company is considering the sale of the PVT Synergy vessel, depending on market conditions, to fund the purchase of new oil/chemical and bulk carriers ranging between 19,000 to 75,000 DWT.

"The decision to sell PVT Synergy after five years of profitable operation is to make way for larger, more capable vessels," Thuan explained.

In May 2023, the company capitalised on favourable market conditions to invest in the PVT Jupiter. By October, after boosting its capital by $5 million, PVT Logistics was well-positioned to make further strategic investments.

"The operational efficiency of our new investments was immediate," Thuan stressed, underscoring the impact of strategic fleet enhancements.

With regards to raising capital, the firm has paused its initial plan to issue just over eight million shares due to unfavourable market conditions. Instead, it has approved the issuance of over 23 million shares to raise about $9.58 million, aimed at increasing its registered capital to $27.54 million.

The company has approved a 10 per cent cash dividend for 2023, totalling approximately $1.79 million.

In response to queries about why shares of PVT Logistics are trading below book value, Thuan explained, "The limited liquidity of our shares is primarily due to the fact that 85 per cent are held by major shareholders, leaving only about 15 per cent in the hands of external investors, among whom many are small shareholders not actively tracking our progress."

He further elaborated on the company's plans to address these concerns. "We expect the liquidity to improve with the upcoming capital increase. Furthermore, we are looking to expand our business lines to increase foreign ownership from zero to 49 per cent and enhance our outreach to potential investors to better reflect our robust financial health."

Nguyen Hoai Phuong, a board member of PVT Logistics and representative of major shareholder Tan Long Company, which owns 25.84 per cent of PVT Logistics, echoed the sentiment of wanting to see a higher share price.

"Above all, I am keen to see our share price appreciate, reflecting our strong financial fundamentals and competitive position. I estimate that our shares are currently undervalued by about 20 per cent due to limited liquidity and insufficient communication about our business effectiveness and future prospects," Phuong said.

On the governance side, Le Truc Lam has been nominated as chairman of the board for the 2024-2029 term. Lam brings a wealth of experience with a bachelor’s from Ho Chi Minh City University of Economics and a master’s in project management from Foreign Trade University, in collaboration with the University of Nantes in France.

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