Why did MPC suffer heavy losses?

Financial Performance and Heavy Losses

The recently published consolidated financial report for Q4/2024 shows that MPC generated around VND 3,900 billion in revenue, which is 21% more than it did at the same time last year. However, Minh Phu's gross profit was only slightly over VND 101 billion, which was a decrease of more than 65% from the year before, as a result of a more significant increase in the cost of goods sold (COGS), which jumped over VND 3,797 billion, an increase of about 29.5% year over year.

Even though the business made an attempt to reduce expenses and saw a significant rise in sales, these actions were not enough to stop a quarterly loss. Compared to a net profit of over VND 9 billion during the same time previous year, Minh Phu reported a net loss of over VND 190 billion. This loss was ascribed by the corporation to the inefficiency of its off-season commercial shrimp farming and breeding operations.

MPC announced total income of more than VND 14,731 billion for the entire year 2024. But it lost VND 235 billion in total, with the parent business alone suffering a loss of more than VND 240 billion. The greatest loss in Minh Phu's history was this one. The company's aggressive goals for 2024, which called for VND 18,568 billion in revenue and VND 1,265 billion in net profit, were greatly exceeded by the outcomes.

Industry-Wide Challenges for Vietnam's Shrimp Sector

Minh Phu’s bleak business performance over the past two years reflects broader challenges faced by Vietnam’s shrimp industry. While shrimp export turnover showed growth in 2024, the industry continued to grapple with difficulties, including price fluctuations and global economic factors.

In 2024, Vietnam’s shrimp export turnover reached approximately USD 4 billion, a 15% increase compared to 2023. The sector received positive signals, particularly from the U.S. market, where a recovery in seafood demand—especially during the year-end holiday season—drove strong shrimp export growth. Similarly, demand for shrimp in key markets such as the EU and Japan also saw steady increases.

However, Vietnam faces fierce international competition from major shrimp-producing countries like Ecuador, India, and Indonesia. Additional challenges such as rising production costs, trade barriers, disease outbreaks, and climate change continue to put pressure on Vietnam’s shrimp industry.

Outlook for 2025 and Beyond

Experts forecast that Vietnam’s shrimp exports will continue to face significant challenges in 2025. A prolonged shortage of raw shrimp is expected to persist until the end of Q1/2025, leading to a sharp decline in commercial shrimp supply. Consequently, rising raw shrimp prices will drive up production costs, further squeezing profit margins for shrimp processing companies.

Looking at the broader picture, the National Action Plan for Vietnam’s Shrimp Industry Development, issued by the Prime Minister under Decision 79/QD-TTg on January 18, 2018, set ambitious targets for 2025. These include expanding shrimp farming areas nationwide to 750,000 hectares, achieving an output of over 1 million tons, and reaching an export turnover of USD 10 billion.

As of 2024, Vietnam’s shrimp farming area has expanded from 644,000 hectares in 2012 to 740,000 hectares. Shrimp production has also increased significantly, from 463,000 tons in 2012 to 1.3 million tons in 2024. While the industry has met its goals for farming area and output, shrimp export turnover has stagnated since 2018.

Forecasts suggest shrimp export turnover in 2025 will only reach between USD 4.3 billion and USD 4.5 billion. This means that achieving the ambitious USD 10 billion export target set for 2025 remains a formidable challenge for Vietnam’s shrimp industry.