The railway industry is recovering.

Increased travel demand and better cost reduction have helped Hanoi Railway and Saigon Railway achieve their highest profits in many years.

According to the recent financial report, Hanoi Railway Transport Joint Stock Company (HRT) had revenue of about VND2,460 billion, an increase of more than 6% over the same period. The peak revenue fell in the first and third quarters. In addition, financial revenue increased nearly 3 times to about VND11 billion.

Over the past year, HRT has reduced its business management costs, financial costs and other costs. In total, the company earned more than VND 14 billion in profit after tax, up 2.4 times compared to 2022. This is the highest level since 2016. HRT is still more than 3% away from its revenue target but has exceeded its profit plan for the year by 2.4 times.

Positive business results were also recorded at Saigon Railway Transport Joint Stock Company (SRT). Revenue reached nearly VND 1,700 billion, up nearly 9% compared to 2022. Similar to HRT, revenue peaks were also in the first and third quarters. Thanks to slower increases in cost of goods sold, gross profit improved.

After deducting expenses, SRT earned nearly VND11 billion in profit after tax, up 27 times. This is the company's highest profit in the past four years. The company is about 3% away from its revenue target but has exceeded its annual profit plan by 18 times.

Saigon Railways said that in 2023, the travel demand of domestic and international tourists will increase, especially during the Lunar New Year and summer. These two peak periods fall in the first and third quarters, which are also the two periods that contribute the most revenue and profit to both businesses.

Despite making a profit for the year, HRT and SRT lost nearly VND84 billion and nearly VND70 billion respectively in the last quarter of the year, mainly due to the cost of repairing train cars. Hanoi Railway said that due to the increased demand for train cars, the number of cars needing repair increased by 40% compared to the same period last year. The company had to bring more than 360 cars into the workshop at a cost of more than VND18 billion.

Saigon Railway also said that in the last quarter of 2023, it focused on repairing carriages to prepare for the upcoming Tet Giap Thin peak. In addition, the company also had to make provisions for bad debts and set aside a reserve salary fund.

Passengers arrive at Saigon station (District 3), October 2021. Photo: Quynh Tran — Passengers arrive at Saigon station (District 3), October 2021. Photo: *Quynh Tran*

Hanoi Railway and Saigon Railway are the largest members of Vietnam Railways Corporation (VNR). HRT manages routes from Hanoi to Ho Chi Minh City, Lao Cai, Dong Dang, Hai Phong and two routes Yen Vien - Quan Trieu, Kep - Cai Lan. The company also organizes international freight and passenger transportation through the two border gates Ha Khau and Huu Nghi. This enterprise said it owns 600 passenger carriages, 3,300 freight carriages and 5,000 employees.

SRT manages routes from Ho Chi Minh City to Hanoi, Nha Trang, Tuy Hoa, Da Nang, Hue, Vinh, Lao Cai, Hai Phong, Lang Son, etc. The company also operates tours to famous tourist destinations. In addition, SRT also owns business locations at major stations across the country such as Song Than, Saigon, Nha Trang, Da Nang, Giap Bat, Hanoi, Lao Cai and Dong Dang.

Previously, both HRT and SRT experienced a period of continuous business losses. In addition to the impact of the epidemic, Hanoi Railway also admitted that the service style of employees did not meet customer requirements, especially the elderly group of workers, the phenomenon of "customer booking" and "goods booking" existed, and the trains did not have wifi.

Meanwhile, Saigon Railways admits that they offer high ticket prices, are difficult to compete, have poor service quality, and outdated means of transport.

Siddhartha

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