Cargo volume dropped sharply amid a difficult global economic situation in the first quarter of 2023, thereby ending 2 years of "smooth flying" of leading enterprises in this business.
In the first quarter of 2023, Saigon Cargo Service Corporation (HOSE: SCS) recorded net revenue of $6,8 million and net profit of $4,8 million, down 34% and 40% respectively over the same period. Meanwhile, these two figures at Noi Bai Cargo Terminal Services JSC (HOSE: NCT) decreased by 21% and 25% respectively over the same period, reaching $6,3 million and VND $1,9 million.
In addition, gross profit margin also decreased, in which SCS dropped to 76% and NCT down to 43%.
This situation appears to be in contrast to 2 years ago, when booming cargo demand, coupled with supply chain disruptions, boosted air freight activity.
According to the explanation of SCS, business results plunged because the total international goods volume decreased by 45% over the same period, amid the difficult context of the global economy.
The challenges in the economy is also the reason given by NCT. The company said that in the first quarter of 2023, the situation was not favorable because the world economy was uncertain and exports dropped sharply. "Facing such challenges, the company's service output in the first quarter of 2023 was also significantly affected," NCT said.
In addition, the sharp decrease also came from the sudden surge in the volume of goods via air in the first quarter of 2022 - the period when the COVID-19 epidemic was still lingering.
Although business results have cooled, the balance sheets of the two businesses are still healthy.
SCS has more than $48 million of short-term assets, of which 93% is cash and held-to-maturity investments. The company has no loans and finance lease liabilities.
On the NCT side, this enterprise holds $7,1 million of short-term assets, of which $1,83 million in cash, investment held to maturity and $4,7 million of receivables. On the other side of the balance sheet, the Company has loans and short-term finance lease liabilities of $5,2 million.
DHL Global Forwarding (DHL GF) paints a broadly stable picture for air cargo demand in its November ‘Air Freight State of the Industry‘ report.
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IATA has released data for global air cargo performance in September that shows that the industry enjoyed a continued moderate recovery in the month.
Ultra-large and large forwarders are losing market share in air freight to small and medium-size agents, according to WorldACD Market Data.
Airfreight rates on major east-west trades picked up in October as the industry entered its traditional peak season (see dashboard at end of article).