The Hanoitimes - The railway sector is under fierce competition from road and air transport.
State-run Vietnam Railways (VNR) saw its after-tax profit decrease by 20.4% year-on-year to VND108.6 billion (US$4.63 million) in the first six months of 2018, the firm has said in a financial statement.
This was despite an increase of 8.3% year-on-year in revenue to VND1.27 trillion (US$54.12 million) during the period.
The railway sector is under fierce competition from road and air transports, resulting in a decline of 10.6% year-on-year in passenger to 4.5 million and 1.9 billion passengers-kilometers, down 4.5% in the January - June period.
Cargo carriage in the period reached 2.9 million tons, up 4.1% year-on-year, and 1.9 billion tons - kilometers, up 13.5% year-on-year.
In the April - June period, VNR's revenue reached VND643.9 billion (US$27.44 million), up 12.3% year-on-year. However, due to an increase of 18.3% in cost of goods sold compared to the same period of last year, VNR's gross profit margin decreased by 26%.
Although the company's financial, sale and administrative expenses declined in the second quarter and income from financial activities increased by VND7.7 billion (US$328,197), VNR's after-tax profit declined to VND38.2 billion (US$1.62 million), down 17.5% year-on-year.
As of June 30, VNR's total asset value reached VND15.48 trillion (US$659.6 million), of which, long-term assets accounted for 86.4% at VND10.83 trillion (US$461.48 million) of the total.
Additionally, VNR's payables stood at VND726.3 billion (US$30.95 million).
In 2018, VNR sets consolidated revenue target of VND8.59 trillion (US$366.13 million) and after-tax profit of VND158 billion (US$6.73 million). The national train carrier expected to contribute VND374 billion (US$15.93 million) to the state budget.
The Vietnamese railway industry witnessed declining popularity. In 2016, the train passenger volume dropped by 17% compared to 2015 to 9.8 million, while during the first six months of 2017, it had 5 million passengers, down 2.9% compared to the corresponding period last year, according to Vietnam Railway Corporation's statistics.