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Vietnam railway sector posts record H1 revenue
Ngoc Mai 16:37, 2024/07/05
State-run Vietnam Railways (VNR) achieved record revenues in the first half of this year, averaging nearly US$1 million per day.

VNR reported half-year revenue of over $191 million, a 10% increase compared to the same period in 2023. This semiannual revenue sets a new record for VNR and surpasses the total annual revenue for the years 2019-2021.

 The railway sector has seen a surge in revenue. Photo: Phan Anh/The Hanoi Times

The company averaged nearly $1 million in daily revenue.

This year, VNR seeks to achieve a total revenue of $266 million. Halfway through the year, the company has already met almost 72% of its target. The company has not yet released its half-year profit figures. The management noted that passenger transport volume in the first six months increased by nearly 21% compared to the same period last year. Specifically, during the Tet holiday, the railway sector sold 650,000 tickets, generating nearly $17 million, or 7.5% higher than the last year.

The company has launched specialized train services such as the "Heritage Connection" train on the Hue - Danang route, the "Da Lat Night Journey" train, and charter trains with customized routes and services to meet customer requirements.

VNR has also implemented measures to boost international freight volumes, including expanding Vietnam-China transborder train service and transporting goods through China to Russia, Europe, Mongolia, and Central Asia.

However, the railway sector has recently faced two significant incidents, including landslides at the Bai Gio and the Chi Thanh tunnels, causing blockages on the Hanoi - Ho Chi Minh City railway line. These incidents incurred additional costs and indirect losses totaling over $4.5 million.

VNR consists of 25 subsidiary companies, 17 directly affiliated units, and eight joint ventures and associate enterprises. VNR is responsible for managing the railway infrastructure system, which has a total length of 3,143 km and covers 15  lines across 34 provinces and cities from North to South.

Last year, VNR returned to profitability after three years of losses, posting a profit of $3.3 million. During the 2020-2022 period, the company reported losses amounting to hundreds of millions of VND, with the highest loss exceeding $54.5 million. By the end of 2023, VNR had accumulated losses of over $87 million, or 1.5 times its equity.

Within VNR's ecosystem, Hanoi Railways (HRT) and Saigon Railways (SRT) are the two largest members. Last year, the financial health of these two units showed significant improvement, with profits of $603,000 and $474,000, respectively.

In the first quarter of this year, both HRT and SRT performed well, reporting profits three times their annual targets due to increased travel demand. In the near future, these two companies will merge, subject to shareholder approval. They are currently in the process of completing the necessary procedures for this merger.

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