Seafood sector faces bleak prospects in 2024

On January 22, Vinh Hoan Corporation (VHC), a major tra fish exporter, released its fourth-quarter (Q4) 2023 financial statement with consolidated revenue and post-tax profit of $101.2 million and $2.79 million, down 3 per cent in revenue and a huge 66.5 per cent in post-tax profit on-year.

This profit level was compared to last year’s fourth quarter, the period when exporters were hit by spiralling inflation in the US and EU markets, both of which are key for Vietnamese exports.

Q4’s profit at VHC was also much lower compared to the first three quarters, causing the company’s consolidated post-tax profit for the whole of 2023 to sink by 53 per cent on-year to just $40.06 million, equivalent to 89.7 per cent of its full-year target.

VHC has attributed its Q4’s shrinking profits to falling export prices and diminishing volumes.

Another southern seafood export major, Nam Viet JSC, witnessed more negative Q4 business results. Its revenue was down by nearly 3 per cent on-year to $46.8 million, leading to nearly $22,000 in losses. The company counted $4.5 million in profit in the same period last year.

For the whole year, Nam Viet saw its revenue down 9.3 per cent to $187.2 million, and pre-tax profit fell by over 90 per cent on-year to just $2.85 million.

With such results, the company only met 22.5 per cent of its full-year pre-tax profit target.

Although its Q4 2023’s financial statement has not been made public yet, Sao Ta Food JSC's (FMC) preliminary summing-up report for 2023 reflects the company’s downbeat performance last year.

Accordingly, its sales revenue declined by 11 per cent on-year to $200.6 million, and its estimated profit came to $12.65 million, down by nearly 10 per cent.

Last year, FMC’s sale volume of shrimp and finished agricultural produce totalled just over 17,400 tonnes and 1,366 tonnes, down 4 per cent and 24 per cent, respectively.

In late October, FMC revised its 2023 business targets, setting its revenue and pre-tax profit goals at $205.4 million and $12.6 million – each down by 25 per cent.

Mekong Fisheries JSC (AAM) also witnessed a gloomy year in 2023.

In Q4, the company counted $1.6 million in net revenue, down 9.5 per cent on-year, and its post-tax profit contracted by $16,000.

For the whole of 2023, the company secured $5.76 million in net revenue, down 35 per cent on-year, and nearly $30,000 in post-tax profit, marking a significant fall of 96 per cent.

As a result, AAM only fulfilled 75 per cent of its full-year revenue and 8 per cent of its profit target.

According to the Vietnam Association of Seafood Exporters and Producers, the nation counted $9 billion in seafood exports last year, down 18 per cent on-year and equivalent to a drop of $2 billion.

The export value sank across Vietnam’s major export items such as shrimp, tra, and tuna.

After the hardships in 2023, analysts are cautious over the seafood sector's 2024 prospects.

Tran Nhat Trung, analyst at ACB Securities JSC, stated that this year continues to present difficulties in the seafood sector, yet profits might rise slightly.

"We forecast that the demand for seafood imports will not climb significantly in 2024. Following the price movements in late 2023 and early 2024, the price of tra fish in Vietnam’s major export markets is likely to remain unchanged or slightly reduced," he said.

"In addition, with weaker growth prospects in 2024, consumption could be affected. Generally, we believe that the profit picture for seafood exporters in 2024 might be brighter than in 2023, but it is not looking like a breakthrough year for the sector," concluded Trung.

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