As global demand recovers, seafood companies expect higher profits

Vinh Hoan Corporation, the largest listed seafood company, targets a 36.5% increase in profits to VND 1.5 trillion ($65.6 million)

IDI International Development & Investment, the second largest, expects a six-fold increase in profits to VND900 billion.

The industry has been hit hard over the past couple of years as Covid-19 caused demand and supply to decline. The profits of the two companies therefore fell by 40 to 65% compared to 2019.

But they expect strong rebounds this year, with profits up at least 20% from the pre-pandemic year of 2019.

Many others also expect the recovery in global demand since the end of last year to have a significant impact on their results.

Mekong Fisheries JSC expects pangasius to remain its main export product this year.

Sao Ta Foods JSC expects demand to recover further when the pandemic is brought under control in its import markets. He expects shrimp to be favored for its high nutritional value and ease of cooking.

Supply is expected to meet growing demand through expansion of the farming area and the use of new technologies that help control and mitigate the risks associated with shrimp farming, he said. added.

Shrimp and pangasius are expected to remain the top export earners as their prices have been pushed up by a shortage even as demand has picked up.

The industry also expects to benefit from trade agreements like those with the EU (EVFTA) and the UK (UKVFTA).

Pangasius prices would remain high in the first half due to limited supply, Yuanta Securities said.

The fish farming cycle lasts six months and major producers were hit hard by Covid-19 in the second and third quarters of 2021, so supply would start to recover in the second half of this year, he said. added.

But An Binh Securities warned of downside risks such as soaring food and logistics costs and fierce competition from other exporting countries like India, Ecuador and Indonesia.

On the stock market, the seafood sector has seen gains over the past month, with some hitting the ceiling even in steeply declining sessions like March 28.

On Wednesday, Vinh Hoan was trading at around 96,000 VND, up 37% since January.

IDI International Development & Investment has seen a 160% increase since late January and hit a new high of VND 29,300 on Monday.

Sao Ta Foods also hit a record high of 70,600 VND on Wednesday after gaining 48%.

Vietnam’s seafood exports rose 40% year-on-year to $2.4 billion in the first quarter, despite the direct effects of the ongoing Russia-Ukraine crisis.

The growth was led by shark catfish, whose exports rose 88% to $646 million and accounted for 27% of total exports, according to the Vietnam Association of Seafood Exporters and Producers (VASEP). ).

Shrimp remained the top export product, accounting for 37.5% of the total at over $900 million, up 37%.

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