As enterprises publish their financial statements for the second quarter of 2022, many seafood companies exporting pangasius or tra saw a bright picture in their business results.

The positive results in the second quarter and the first half of 2022 were thanks to favourable business conditions for the pangasius industry, with soaring selling prices and higher export volume.

Vietnam Association of Seafood Exporters and Producers (VASEP) said that in the first six months of the year, Viet Nam exported more than US$1.4 billion worth of pangasius, an increase of 83 per cent on-year, with all export markets growing strongly.

China, the US and member countries of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) were the main importers of Vietnamese pangasius in the first half of this year.

According to the recent seafood industry analysis report released by SSI Securities Corporation, the average selling price of pangasius to the US market was about $4.5-5 a kg, a sharp gain of 60 per cent over last year.

In the Chinese market, the average selling price was lower, at $3.1 per kg, but still rose 20 per cent year-on-year.

Demand from major export markets has not only rebound strongly but also been driven by pent-up orders due to production restrictions to prevent the spread of COVID-19 in the second half of 2021, the securities firm added.

In addition, events such as global inflation and the Russia-Ukraine war are also an opportunity for the Vietnamese pangasius export industry, because it was selected as an alternative to pollock and cod in some major markets.

Big returns

The leading pangasius exporter, Vinh Hoan Corporation, topped the list of seafood companies with extraordinary growth.

Its consolidated financial statements for the second quarter of 2022 showed that Vinh Hoan posted net revenue of over VND4.2 trillion, up 80 per cent over last year. Even though the seafood exporter’s cost of goods sold also advanced, rising selling prices help its gross profit surge by 154 per cent to nearly VND1.1 trillion.

As a result, Vinh Hoan recorded profit after tax of VND788 billion in the second quarter of 2022, 3 times higher than the same period last year.

Vinh Hoan said that its profit jumped sharply during the period thanks to strong increases in both pangasius outputs and prices in recent years.

For the first half of the year, the company’s profit after tax reached more than VND1.3 trillion, 3.4 times higher than that of the same period in 2021.

Vinh Hoan has completed nearly 84 per cent of this year’s profit after tax plan. In 2022, the company set a profit after tax of VND1.6 trillion, a gain of more than 45 per cent on-year.

Similarly, Nam Viet Corporation saw strong growth in profit in the second quarter from the pangasius segment. During the period, Nam Viet's net revenue reached nearly VND1.3 trillion, up 20 per cent year-on-year.

Notably, it recorded a net profit of nearly VND241 billion which was 10 times higher than the same period last year.

In the first half of the year, the company’s net revenue climbed 41 per cent to VND2.5 trillion. The growth was mainly driven by the pangasius segment. Its profit after tax reached VND447 billion, 5 times higher than the same period last year. With the result, Nam Viet has achieved 51 per cent of 2022’s profit target.

I.D.I International Development & Investment Corporation, another listed pangasius exporter, also recorded outstanding performance in profit after tax during the period.

Specifically, in the second quarter of 2022, I.D.I's consolidated net revenue reached nearly VND2.4 trillion, up 30.4 per cent. Its gross profit rose by nearly 198 per cent to VND429.3 billion, resulting in a gain of more than 8.5 times in profit after tax to VND229.4 billion.

Accumulated in the first half of 2022, I.D.I's consolidated net revenue and profit after tax reached VND4.3 trillion and VND430.8 billion, up 33.1 per cent and nearly 10 times over the same period last year, respectively.

Besides these three enterprises, VASEP said that many other pangasius exporting companies also recorded higher sales in the first half of this year. For example, exports of Bien Dong Seafood added up 41 per cent, Van Duc Tien Giang Food Export Company up nearly 61 per cent, Dai Thanh Seafood up 118 per cent and NTSF Seafoods JSC rose 87 per cent.

High inflation limits growth

However, demand has shown signs of slowing down since May, due to high inventories in export markets.

According to VASEP, inflationary pressure is expected to be a brake on pangasius export growth in the third quarter of 2022. The growth momentum of pangasius businesses may, therefore, face headwinds.

Seafood consumption, including in the US market, has shown signs of slowing down, some importers said.

Inflation in the US is at a four-decade high, causing essentials to be more and more expensive. At chain stores and convenience stores, sales of frozen seafood were negatively affected by rising inflation, but not as seriously as fresh seafood sales.

Meanwhile, the US warehouses are still full of imported seafood. Therefore, it is possible that in the next quarter, pangasius exports to the US will grow at a slower pace than in previous quarters.

Most seafood companies also reported that inventories in export markets, especially the US, had reached a high level, due to high import volumes during the period of January-May.

And due to the low season for seafood exports, companies forecast that export growth will decelerate in the third quarter of 2022.

Nevertheless, despite inflationary pressure, pangasius exporters still expect pangasius demand to increase rapidly in September, right before the Thanksgiving and Christmas holidays in November and December. VNS