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Vietnam Airlines records loss of US$155 million in Q3

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The national flag carrier Vietnam Airlines has recorded a net loss of VND3.5 trillion ($155 million) in the third quarter of this year, a sharp decrease compared to nearly VND4.9 trillion and VND4.4 trillion reported in the previous quarters.

Vietnam Airlines records loss of 155 million USD in Q3 hinh anh 1

The national flag carrier Vietnam Airlines has recorded a net loss of 3.5 trillion VND (155 million USD) in the third quarter of this year. (Photo courtesy of Vietnam Airlines)

The national flag carrier Vietnam Airlines has recorded a net loss of 3.5 trillion VND (155 million USD) in the third quarter of this year, a sharp decrease compared to nearly 4.9 trillion VND and 4.4 trillion VND reported in the previous quarters.

The loss of its parent company is estimated at over 3.3 trillion VND and the total gross loss of the airline is over 3 trillion VND.

In its consolidated financial statement for the third quarter, Vietnam Airlines said that both its revenue and after-tax profit suffered a big drop against last year’s figures,

According to Vietnam Airlines, the total revenue and other incomes in the third quarter of the parent company were down by 2.6 billion VND, representing a year-on-year decrease of 41.3 percent. The corporation attributed it to a 51.9 percent decline in revenue from services in the period.

The carrier said the fourth wave of COVID-19 infections, which took place during the peak time of summer, has affected the corporation’s business results.

In addition to the decrease in profits of the parent company, the profits of subsidiaries providing aviation services like Vietnam Airlines Engineering Company (VAECO) and Noi Bai Airport Services Company (NASCO), also declined sharply, it said.

To deal with the situation, Vietnam Airlines has proactively adopted drastic solutions in business operations to minimise the impacts of the COVID-19 pandemic.

Accordingly, it has taken advantage of the support of partners and suppliers to maintain operations, scale down production while cutting costs, resulting in a significant drop in the Q3 losses compared to the first two quarters.

Notably, on September 25, the carrier increased its charter capital to nearly 8 trillion VND to help improve the financial situation.

Vietnam Airlines said it is expected that with the resumption of regular domestic flights from October, business activities will gradually stabilised and it is ready for the recovery phase in the future./.

Source: VNA

Source: https://vietnamnet.vn/en/business/vietnam-airlines-records-loss-of-155-million-usd-in-q3-797030.html

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Vietnam remains attractive destination to international investors: HSBC survey

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Vietnam keeps being an attractive investment environment for global investors, with many Indian and Chinese enterprises saying they plan to expand their business in the Southeast Asian country in the next two years, according to an HSBC survey. 

The UK-based HSBC Holdings plc (HSBC), one of the largest banking and financial services institutions in the world, has recently released the results of a large survey of nearly 1,600 companies from six of the world’s largest economies all of which have operations in Southeast Asia.

The survey, ‘HSBC Navigator: Southeast Asia (SEA) in Focus,’ covered 1,596 companies from the U.S., the UK, China, France, Germany, and India.

Survey respondents were key decision-makers from companies already doing business in SEA or those considering doing so.

These international businesses have strong expectations for continued growth in SEA, including Vietnam, which “has been striding forward in recognition and application of the sustainability agenda.”

About 21 percent and 26 percent of Indian and Chinese firms operating or intending to operate in SEA, respectively, said they plan to expand their business in Vietnam in the next two years.

In respect of Vietnam’s advantages, three out of ten businesses pointed to a skilled workforce, while 27 percent cited competitive wages and proven economic resilience in response to the COVID-19 pandemic.

Forty-nine percent of the Indian companies surveyed said they were enthusiastic about Vietnam’s supportive government and regulatory environment, while the corresponding rates of the American and Chinese firms are 33 percent and 30 percent.

Encouraged by Vietnam’s regulatory environment, 36 percent of the American companies in the poll said that they were keen on opportunities to develop and test new products and solutions in the market.

Meanwhile, 39 percent of the Indian companies stated they were attracted by Vietnam’s infrastructure.

Notably, 49 percent of the firms polled, mostly from China, India, and the U.S., expressed their hope to make use of the EU – Vietnam Free Trade Agreement (EVFTA) to further promote their trade operations in the region.

Being attracted by the supply chain ease and social and political stability of Vietnam, a quarter of the German respondents selected both as positive features of the Vietnamese market.

“Vietnam has been striding forward in recognition and application of the sustainability agenda to become a regional leader in its progress toward achieving the 17 United Nations Sustainable Development Goals (SDG),” HSBC said in the survey.

Ranked 51st out of 162 countries by the SDG Index, Vietnam is thus rated as having greater success than all other Southeast Asian countries barring Thailand, according to the poll.

However, some 31 percent of the respondent enterprises operating in Vietnam worried that new regulations and rules on carbon reduction could impact them, while 36 percent flagged the difficulty in hiring employees who possessed the correct sustainability credentials and knowledge.

Vietnam’s GDP growth is expected to make an impressive recovery over the course of 2022, likely reaching a 6.2 percent progression following a 2021 low of 2.6 percent, HSBC forecast.

The country is rising as a global production hub thanks to the incentives given by the government, especially in the signing of free trade agreements, HSBC Vietnam CEO Tims Evans said.

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Source: https://tuoitrenews.vn/news/business/20220528/vietnam-remains-attractive-destination-to-international-investors-hsbc-survey/67346.html

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Intel plans to expand investment in Vietnam

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American technology company Intel has plans to broaden business and investment activities in Vietnam following the country’s good management of the COVID-19 pandemic, the Vietnam Government Portal (VGP) quoted Intel CEO Patrick Gelsinger.

The Intel executive made the statement at a meeting with Vietnamese Prime Minister Pham Minh Chinh in Hanoi on Friday.

Vietnam is an attractive destination for foreign investors as it is a vibrant economy and a promising market, CEO Gelsinger said.

He highlighted that Vietnam remains a charming investment destination in the eyes of foreign investors thanks to its dynamic economy, potential market, and industrious population.

He appreciated the Vietnamese government’s efforts in creating favorable conditions for foreign investors, particularly its support for Intel to maintain production amid the pandemic time.

Chinh, who visited Intel’s headquarters in California earlier this month, praised semiconductor chip manufacturer’s investment activities in Vietnam over the past 15 years.

Intel’s assembly and test factory, located in Saigon Hi-Tech Park in Ho Chi Minh City, became the U.S.’s biggest high tech project in Vietnam.

Since it came into operation in 2010, the factory has generated hundreds of jobs and consolidated Vietnam’s status in the global semiconductor supply chains.  

Chinh recommended that Intel build a research center in Vietnam and assist the Southeast Asian nation in building up a startup and innovation ecosystem and high-quality workforce.

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Source: https://tuoitrenews.vn/news/business/20220528/intel-plans-to-expand-investment-in-vietnam/67342.html

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E-bike buyers face serious sticker shock amid rising gasoline prices

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Increased fuel prices are wreaking havoc across the transportation industry in Vietnam as costs of once wallet-friendly alternatives, such as e-bikes, ride-hailing services, and budget airlines all steadily rise as a result.

To combat the problem, the government is considering proposals to cut taxes on gasoline and oil, according to the National Assembly (NA).

Ripple effect

Nguyen Tri, sales manager for electric bike brand PG, explained that the increased price of e-bikes and e-scooters is due to the rising costs associated with transporting the bikes to sales outlets and distributors.

According to Tri, PG had resisted raising rates at the beginning of the year despite spare part shortages and rising transport costs, but once fuel in Vietnam surpassed VND30,000 (US$1.28) per liter and transport operators hiked fees by 10 percent in March, the firm was left with no choice.

“The increased prices of input materials, such as aluminum, steel, and electric wires have forced the prices of spare parts up by 10 to 20 percent,” Tri explained, adding that the hike in fuel prices has left an enormous impact on the firm’s post-pandemic recovery.

The freight industry has faced the same fate.

Nguyen Kim Thanh, director of Kim Phat Transportation Company in District 12, Ho Chi Minh City, said that record-high fuel costs are creating serious struggles for her firm as it attempts to renegotiate with customers. 

The on-demand delivery sector is also confronting woes as a result of the rising cost of fuel, coupled with a decrease in demand, with Grab, GoJek, and Be drivers all struggling to earn a living.

Many are now considering looking for new jobs, including Nguyen Phuc Bao Chau, a student from Bach Viet College in Ho Chi Minh City, who is a part-time delivery worker.

“I am thinking about quitting my current job and seeking a new one because of soaring gasoline prices and sluggish demand,” Chau said.

More expensive fuel has also placed an undue burden on local airlines, including Vietnam Airlines, Vietjet Air, Bamboo Airways, and Vietravel Airlines.

A commercial deputy director of a local air carrier told Tuoi Tre (Youth) newspaper that airlines’ business operations remain slow although the aviation sector is showing positive signs of recovery.

Some nations are still limiting the number of air passengers aboard inbound flights, in some cases lowering flight capacities by up to 50 percent.

This, along with rising gas prices, is putting serious pressure on airlines.

If jet fuel continues being traded at $130 per barrel in 2022, the cost will add VND5.7 trillion ($245 million) over the course of the year, according to local airlines.

That number will jump to VND9.12 trillion ($392 million) if jet fuel hit $160 per barrel.

The way forward

Speaking about inflation, NA deputy Nguyen Manh Hung from Can Tho City, a permanent member of the NA Economic Committee, told Tuoi Tre that the spike in petrol and oil prices has become a hot topic as it stokes fears of high inflation.

To keep inflation under control, it is vital to reduce excise taxes on gasoline and oil.

In addition, it is urgent to refill the country’s petrol and oil reserves, while obstacles facing the Nghi Son refinery, which accounts for as much as 40 percent of the country’s fuel supply, should be removed soon, said Hung.

Fuel inventories at enterprises should also be addressed.

The prices of fuel will only stabilize when there is an abundant supply of gasoline and oil.

Furthermore, accelerating fuel rates have make food and foodstuffs more expensive. The prices of food are forecast to jump to over 20 percent in the near future.

The NA Economic Committee shared its support for the government’s plan to keep inflation below four percent and requested a clearer scenario for it amid economic growth.

The country’s economic growth target of 6-6.5 percent, plus relief packages for post-pandemic recovery, is expected to drive up inflation.

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Source: https://tuoitrenews.vn/news/business/20220528/ebike-buyers-face-serious-sticker-shock-amid-rising-gasoline-prices/67332.html

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