HANOI: High freight and charter rates are benefitting oil tanker shipping companies, bolstering business performance.

In the second quarter of 2024, Pacific Petroleum Transportation JSC (PV Trans Pacific) reported net revenue of over US$359bil, on par with the same period last year.

Its profit after tax was recorded at over 62 billion dong, an increase of 17.3% year-on-year. For the first half of 2024, the company’s profit after tax reached nearly 109.3 billion dong, up 8.2% over last year.

PV Trans Pacific said that the gain in profit was due to favourable freight rates in the international market. The company also achieved significant cost savings for its fleet operations.

Factors such as increased foreign exchange gains and decreased financial income also impacted the company’s profitability, it added.

Similarly, Vietnam Tanker JSC (Vitaco) recorded a consolidated profit after tax of 24.58 billion dong, a strong increase of 313.54% from the same period last year.

Revenue was mainly derived from the provision of transportation services, accounting for over US$253bil.

Cumulatively, in the first six months of 2024, Vitaco saw robust profit growth of nearly US$52.7bil, an increase of 165% year-on-year.

According to Vitaco, the main reason for the company’s strong increase in profit after tax during this period was the decrease in operating costs for transportation services as depreciation expenses for its ocean-going fleet were lower.

Vietnam Ocean Shipping JSC (Vosco) also posted growth in the first half of 2024, with profit after tax of over US$358bil, more than four times higher than last year.

In the second quarter only, Vosco’s consolidated financial statements showed the company earned revenue of over 1.8 trillion dong, a slight increase compared to the same period last year.

Vosco’s total pre-tax profit reached over US$344bil, more than 50 times higher than the same period in 2023.

As a result, the company reported a net profit of 283.8 billion dong during the period, an increase of over 200 times from last year.

Currently, Vosco operates a fleet across three main vessel segments: oil tankers, container ships and general cargo ships.

The company’s oil tanker operations are providing a major revenue stream.

International experts said that global geopolitical instability and the crisis in the Red Sea have led to changes in global maritime trade routes.

Many ships have had to take a longer route around the Cape of Good Hope, resulting in longer transportation distances and higher freight rates.

For oil tankers, the demand for both crude and refined product tankers has increased by 5.5% and 4.5%, respectively, so far this year, according to a report by Maritime Strategies International.

Spot freight rates, time charter rates and second-hand vessel prices are all forecast to increase.

Data from the maritime research firm Drewry showed that over the past six months, the average one-year charter rate for Aframax tankers increased from US$41,700 per day to US$44,300 per day.

The three-year charter rates for oil tankers have also risen, increasing from US$30,400 per day last year to US$36,700 per day, reflecting the high demand.

Current oil tanker freight rates have a stable to slightly downward trend due to a roughly 20% decrease in Russia’s oil production, Hoang Duc Chinh, director of PV Trans Pacific, told baogiaothong.vn.

“In the third quarter, freight rates are expected to be slightly lower but are likely to rebound by the end of 2024.

“The current market fluctuations remain quite volatile, so any forecasts can only be made in the short-term,” Chinh noted.

Despite these elevated asset prices, in the face of positive signals from the oil tanker market in the near term, many companies are still actively investing in and expanding their fleets to capitalise on emerging market opportunities and strengthen their shipping capabilities.

For example, Vitaco is planning to aggressively search for and invest in a new sea-going vessel to replace the Petrolimex 08 vessel that has been sold, with a maximum value of US$40mil.

Meanwhile, PV Trans Pacific intends to increase its fleet.

The company is considering its options and closely monitoring market developments to grow its fleet and expand its production and business scale in order to optimise investment efficiency and capital utilisation.

 - ANN