Pangasius processing line for export at the factory of Southern Seafood Industry Company Limited. Illustrative photo: Vu Sinh/VNA
In fact, after many years of profitable business, seafood businesses have suffered losses. Anticipating the challenges, many businesses set profit plans for 2023 lower than last year.
Faced with the above situation, the Prime Minister and management agencies also met to discuss and propose solutions to overcome difficulties for seafood businesses.
Minh Phu Seafood Corporation - Vietnam's leading shrimp exporter is a typical example. In the first quarter of 2023, the company recorded a net loss of VND97 billion, while in the first quarter of 2022, it had a net profit of VND90 billion. The company suffered a loss in the first quarter of this year due to a 75% decrease in gross profit. With this result, Minh Phu officially recorded a loss after nearly 7 consecutive years of profit (the most recent loss was in the second quarter of 2016).
In 2023, the leading shrimp producer targets an output of 45,000 tons and an export value of 540 million USD. Specifically, "shrimp king" Minh Phu targets revenue of VND 12,789.5 billion, down 22% compared to 2022; after-tax profit of VND 639.3 billion, down 23% over the same period.
Vinh Hoan Joint Stock Company (stock code: VHC) - the leading enterprise in the pangasius industry also had a sharp decrease in revenue and profit in the first quarter of 2023 compared to the same period. Specifically, the revenue in the first quarter of 2023 of the "pangasius queen" reached 2,221 billion VND, down 32% compared to the same period. Vinh Hoan earned nearly 219 billion VND in profit after tax in the first quarter of 2023, down 60% compared to the same period last year.
Realizing that there will be many difficulties to face, in 2023, Vinh Hoan plans to have revenue of VND 11,500 billion, down 13.1% compared to 2022; profit after tax of VND 1,000 billion, down 49.4% compared to the implementation in 2022.
Next, Nam Viet Joint Stock Company (Nam Viet Seafood - stock code: ANV) - a large enterprise in the seafood sector, recorded net revenue of VND 1,155 billion, down 5% over the same period last year. Nam Viet Seafood's after-tax profit in the first quarter of 2023 reached only VND 92.4 billion, down 55% over the same period last year.
In 2023, Nam Viet Seafood plans to have total revenue of VND 5,200 billion and pre-tax profit of VND 500 billion. Thus, the company's planned revenue in 2023 will increase by 6% compared to 2022, but the planned pre-tax profit will decrease by 35%.
In fact, it is understandable that seafood businesses have negative business results due to a serious decline in consumption in major export markets.
According to the Ministry of Agriculture and Rural Development, in the first 5 months of 2023, many major export items had a decrease in export value compared to the same period last year; of which, seafood exports reached nearly 3.4 billion USD, down 28% compared to the same period in 2022. Many seafood products decreased sharply such as: pangasius exports reached only 690 million USD, down 40.7%; shrimp exports reached 1.22 billion USD, down 34.4%...
According to analyst Nguyen Thi Thanh Hang, VNDIRECT Securities Joint Stock Company (VNDIRECT), the sharp decrease in export value of key seafood products is due to the main market demand being heavily affected by high inflation and economic recession, causing both export volume and average selling price to decrease.
2022 is considered a year of great success for the seafood industry with total revenue and net profit of listed seafood companies increasing by 29% and 86% respectively thanks to increased demand in the US market after the pandemic.
But in 2023, the business results of enterprises turned negative. According to VNDIRECR's estimates, the business results of listed seafood companies in the first quarter of 2023 decreased significantly, with the revenue of seafood exporting companies decreasing by 32% compared to the same period in 2022.
Gross profit margins of most companies decreased, especially pangasius exporting enterprises when the average selling price of fish decreased sharply by 12% compared to the same period last year. Therefore, the net profit of listed seafood enterprises recorded a decrease of 74% compared to the same period in 2022.
Pangasius exporting enterprises have seen a sharp decline in business results due to a high base level in the first quarter of 2022 when demand from the US market increased sharply, along with importers increasing orders to compensate for inventory shortages.
Leading pangasius exporting enterprises such as Vinh Hoan Joint Stock Company or Nam Viet Joint Stock Company (stock code: ANV) said that although pangasius is considered a food item that is affordable for consumers, it cannot avoid the negative impact of economic recession and high inflation, which weakens purchasing power.
Meanwhile, production input costs such as raw fish or fish feed have decreased much less than the decrease in average selling prices, along with interest costs in a high interest rate environment that have "eroded" companies' profits.
Due to weak demand from major export markets and high production costs, listed seafood exporters in the industry, especially pangasius enterprises, have set more cautious business plans compared to 2022.
Most businesses plan 2023 revenue to be greater than, or equal to, 2022 revenue, but profits will decrease significantly in 2023. This shows that businesses expect gross profits to decrease, even though the average selling price of products may remain high due to inflation.
Meanwhile, shrimp exporting enterprises are somewhat more optimistic about business results in 2023 when expecting revenue and profit to increase compared to the same period. However, with the challenges in 2023, analyst from VNDIRECT Securities Joint Stock Company (VNDIRECT), Ms. Nguyen Thi Thanh Hang, said that this plan of enterprises is quite ambitious.
“With demand from major export markets still affected, we believe that most seafood exporters will record negative net profit growth in 2023 as gross profit margins decline and the high base of 2022,” said Ms. Hang.
According to the Ministry of Agriculture and Rural Development, seafood exports decreased because this is a product that is greatly affected by world market demand.
Seafood exports decreased due to the continued difficulties of the world economy and high inflation in some developed countries. Tight monetary policies, especially in large markets such as the US and Europe, made it difficult for businesses to sign and fulfill orders.
Many countries have implemented policies to increase protection for domestically produced products and goods; and promoted agricultural production to proactively ensure supply, making the export of agricultural products, including seafood, from Vietnam facing many difficulties.
According to Deputy Minister of Agriculture and Rural Development Phung Duc Tien, to ensure the 2023 plan targets for fisheries, the agricultural sector will promptly direct aquaculture production in response to weather developments and market demand. At the same time, it will continue to coordinate with localities to strictly implement solutions to combat illegal fishing.
All stages from varieties, cultivation processes, care, veterinary disease prevention to preliminary processing, packaging, etc. must be smooth to enhance the competitiveness of Vietnamese agricultural products, overcome immediate and long-term difficulties so that Vietnam can have ecological agriculture, modern countryside and civilized farmers.
In mid-April 2023, Prime Minister Pham Minh Chinh also chaired a conference where the Prime Minister worked with the Timber and Forest Products Association and the Seafood Processing and Export Association to remove difficulties and promote the production and export of forestry and seafood products.
The Prime Minister emphasized that the production, processing and export of forestry and aquatic products continue to face opportunities, advantages and difficulties, and challenges intertwined, but with more challenges.
The Prime Minister requested relevant agencies to focus on removing difficulties for businesses in implementing policies related to VAT refunds; promoting trade, especially in large and emerging markets. At the same time, strengthening inspection of law enforcement, ensuring effective implementation of traceability of aquatic products; removing difficulties for aquatic enterprises related to standards on aquatic product processing wastewater and aquaculture pond wastewater...
Source link
Comment (0)