Business in the first 3 months of the year remained positive for SGN, with net revenue of close to 370 billion VND and gross profit of nearly 120 billion VND, representing an increase of 12% and 21% respectively compared to the same period last year. SGN explained that compared to the same period in 2023, although domestic flight catering volume decreased due to the Company discontinuing services for Bamboo Airways from January 1, 2024, the volume of international flight catering was quite high. In addition, the Company has just signed additional service contracts with several new international customers.
SGN’s Q1 2024 Business Results
Unit: Billion VND
Source: VietstockFinance
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The only negative point was a 55% increase in corporate management expenses, to nearly 47 billion VND. SGN reported that the increase was due to additional provisions for doubtful accounts receivable of Bamboo Airways (8.67 billion VND) and Vietravel Airlines (2 billion VND).
Consequently, SGN recorded a net profit of 62 billion VND in Q1/2024, up 12% year-on-year and almost reaching pre-COVID-19 levels. After the first quarter of the year, this ground service giant achieved 28% of its 2024 profit plan.
| SGN’s Quarterly Business Results |
Preparing for the “Battle” at Long Thanh Airport
In the annual SHM documents, SGN presented its 2024 business plan to shareholders with consolidated revenue expected to be 1,499 billion VND, equivalent to the previous year; after-tax profit is 240 billion VND, an increase of nearly 6%.
The plan to expand production and business at Long Thanh International Airport is also an important part of SGN’s development strategy. In 2024, the Company will focus on successfully bidding for the “investment project to construct and operate ground service equipment maintenance and aircraft cleaning areas 01 and 02 – Long Thanh International Airport.
If it wins the bid, SGN will spend nearly 174 billion VND, of which 51 billion VND will be for Tan Son Nhat International Airport (apron equipment, information technology, and preparation for Long Thanh International Airport) and 123 billion for investment in equipment at Long Thanh International Airport.
SGN’s management assessed that the aviation market in 2024 will continue to recover, but it is still difficult to predict due to global risks. Some new markets, such as India, have begun to record growth in passenger volume. However, SGN recognizes that there are still many challenges, including inflation, fuel price fluctuations, and exchange rates, which increase costs. Tan Son Nhat International Airport is also facing difficulties in growth due to slot and infrastructure overload.
