Report of the Board of Directors

Contrary to the gloomy economic picture of the world, Vietnam has become a rare country in ASEAN to achieve positive growth and belongs to the group of economies with the highest growth rate in the world with the GDP growth rate of 2020 reaches 2.91%. Export activities maintained a positive growth with the trade surplus of goods reaching a record number (USD 19.1 billion) and the balance of trade maintaining trade surplus for 5 consecutive years. In addition, the signing of many Free Trade Agreements, especially the European Union Vietnam Free Trade Agreement, has brought positive signals to the Vietnamese economy.

Stepping into 2021, the rate of recovery of global growth will depend heavily on the successful implementation of Covid-19 vaccination programs, the spirit of cooperation between countries, and the resilience of businesses.

Domestically, with the initiative and willingness to prepare the best conditions to boost growth, Vietnam’s economy is expected to have a strong recovery with the GDP expected to increase to 6.5% and the total export turnover increase by 5% compared to 2020. In which, the drive for growth for the economy in 2021 will come from effective pandemic control, the recovery of purchasing power in the domestic market, an increase in private investment, and boost exports to the EU and ASEAN.

Within the country, after series of policies on control, relief, and assistance from the Government, the pandemic situation has been gradually controlled, actively supporting the recovery of the sectors involved in the supply chain. According to the Vietnam Maritime Administration (Vinamarine), in 2020, the total international cargo throughput through Vietnamese ports will increase by 9.8%, of which international container throughput will increase by 9% to 14.4 million TEUs.

By 2021, the aftershocks of the pandemic are likely to persist. However, with positive changes coming from the import and export activities, along with the trend of shipping by large tonnages ships, and action plan to improve competitiveness and develop Vietnam’s logistics services to the year 2025 issued by the Prime Minister in early 2021, Vietnam’s port and logistics sector is forecast to have more positive changes.

With development orientations focusing on e-commerce, retail, cold chain, integrating and promoting cooperation from customers and partners, etc. Gemadept’s logistics activities have achieved impressive growth results. To achieve such important results, in 2020, along with the companionship of partners, customers, and all employees of the Company, the enforcement policies have been implemented strictly, flexibly, and decisively to respond to and overcome the pandemic, ensuring cost optimization and smooth business operations. Entering 2021, with a more prosperous prospect from trade post Covid-19, the recovery of the supply chain, more investment policies, and the encouraging development of the industry, Gemadept’s staff and Board of Management will continue to steadfastly and unanimously overcome challenges to help Gemadept accelerate its breakthrough and firmly stand on the new development path.

In which, port operation continues to be the core activity that is efficient and effective for the Company with recorded revenue of VND 2,171 billion, accounting for 83% of Gemadept’s total revenue. Logistics activities become the highlight for growth with the revenue of VND 434 billion, up by 42% over the same period in 2019 and contribute significantly to the Company’s profit.

During the year, Gemadept has made improvements to its management and cost control policies. Compared to the same period, the total administrative expenses excluding goodwill decreased by 3%, interest expenses increased slightly due to the accelerated disbursement of key projects, one of them is ensuring the progress of the Gemalink deep-sea Port project is completed and will be put into operation by the end of 2020. Another highlight in the financial activities is, with good creditworthiness plus good asset quality, Gemadept always maintains a good interest rate relative to the general market level, especially during the recent period.

In 2020, the Company’s gross profit was recorded at VND 950 billion and the gross profit margin continued to remain stable at 36% with the main contribution coming from the two core businesses of Gemadept, which are port operations and logistics.

Profit before tax in 2020 reached VND 513 billion, sequentially 3% to 19% higher than the annual plan under Scenario 1 and Scenario 2. In the past year, with the right development direction and forcefulness in all fronts from management to operation, the Company has completed the business plan set by the General Meeting of Shareholders with high determination from the Board of Management and all employees while the Covid-19 situation continued with many complicated and unpredictable developments.