Seafood sector faces bleak outlook in 2024

On January 22, Vinh Hoan Corporation (VHC), a major fish exporter, released its fourth quarter (Q4) 2023 financial statements with consolidated revenue and profit after tax of $101.2 million and 2 .79 million, down 3 percent in revenue and a huge profit after tax of 66.5 percent year-on-year.

Seafood sector faces bleak outlook in 2024

This profit level is compared to the fourth quarter of last year, a period during which exporters were hit by spiraling inflation in the US and European markets, two key sectors for Vietnamese exports.

VHC’s fourth-quarter profit was also much lower than the first three quarters, causing the company’s consolidated after-tax profit for all of 2023 to fall 53% year-on-year to just 40.06 million dollars, or 89.7% of its total turnover. -target year.

VHC attributed its fourth-quarter profit decline to lower export prices and lower volumes.

Another major South Sea seafood export company, Nam Viet JSC, reported even more negative business results in the fourth quarter. Its revenue fell nearly 3 percent year-over-year to $46.8 million, resulting in a loss of nearly $22,000. The company made a profit of $4.5 million during the same period last year.

After the difficulties of 2023, analysts are cautious about the outlook for the seafood sector for 2024.

For the full year, Nam Viet saw its revenue fall 9.3 percent to $187.2 million, and its pre-tax profit fell more than 90 percent year-on-year to just $2.85 million.

With such results, the company achieved only 22.5 percent of its pre-tax profit target for the full year.

Although its financial statements for the fourth quarter of 2023 have not yet been made public, Sao Ta Food JSC’s (FMC) preliminary summary report for 2023 reflects the company’s poor performance last year.

As a result, its revenue fell 11 percent year-on-year to $200.6 million, and its estimated profit was $12.65 million, down almost 10 percent.

Last year, FMC’s sales volume of shrimp and finished agricultural products totaled just over 17,400 tons and 1,366 tons, down 4 percent and 24 percent, respectively.

In late October, FMC revised its business targets for 2023, setting its revenue and pre-tax profit targets at $205.4 million and $12.6 million, each down 25 percent.

Mekong Fisheries JSC (AAM) also had a dark year in 2023.

In the fourth quarter, the company reported net revenue of $1.6 million, down 9.5 percent year-on-year, and its profit after tax contracted by $16,000.

For all of 2023, the company reported net revenue of $5.76 million, down 35% year-on-year, and after-tax profit of nearly $30,000, down significant by 96%.

As a result, AAM achieved only 75 percent of its full-year revenue and 8 percent of its profit target.

According to the Vietnam Seafood Exporters and Producers Association, the country recorded $9 billion in seafood exports last year, down 18 percent year-on-year and the equivalent of ‘a drop of 2 billion dollars.

Export values ​​fell for Vietnam’s main export products such as shrimp, tra and tuna.

After the difficulties of 2023, analysts are cautious about the outlook for the seafood sector for 2024.

Tran Nhat Trung, analyst at ACB Securities JSC, said this year continues to present difficulties in the seafood sector, but profits may increase slightly.

“We expect the demand for seafood imports to not increase significantly in 2024. Following price movements in late 2023 and early 2024, the price of marine fish in key export markets of the Vietnam is expected to remain unchanged or slightly reduced,” he said.

“In addition, with weaker growth prospects in 2024, consumption could be affected. Generally speaking, we believe that the profit situation of seafood exporters in 2024 could be better than in 2023, but this does not seem to be a decisive year for the sector.” Trung concludes.

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