Operator of Ben Thanh - Suoi Tien metro posts steep loss
The operator of the Ben Thanh - Suoi Tien metro line earned nearly VND104 billion in ticket revenue in the first half of the year, but posted a loss of more than VND140 billion because not all revenue had been recognized and many costs surged.
The information was disclosed in the semiannual financial report of Urban Railway Company No. 1 (HURC). Most figures differed sharply from the same period last year because the company only officially began operating the Ben Thanh - Suoi Tien metro line in late December 2024 and started selling tickets a month later.
Specifically, HURC recorded first-half ticket sales revenue of VND103.8 billion, equivalent to an average of about VND650 million per day, excluding the free-service period. The company also earned more than VND200 million from non-ticket sources and about VND5 billion in bank deposit interest.
During the initial period of operating the metro line, cost of goods sold, including labor, production and direct material costs, jumped to VND237 billion. After including corporate management expenses, HURC posted a pre-tax loss of nearly VND142 billion, compared with a loss of nearly VND2 billion in the same period last year. This result increased the accumulated loss since its establishment in 2019 to VND177 billion.
Explaining the loss, Le Minh Triet, HURC director, said the Ho Chi Minh City Public Transport Management Center and the Ho Chi Minh City Urban Railway Management Board were carrying out procedures to pay for ordered services, so the figures in the first-half financial report did not fully reflect revenue. The Public Transport Management Center only paid the ordered passenger transport service costs for the first and second quarters in September and October, respectively. As for ordered services for infrastructure management and maintenance, the Ho Chi Minh City Urban Railway Management Board is still awaiting procedures.
In a report sent to the Ho Chi Minh City People's Committee on problems affecting its financial situation, HURC said that after 11 months of operating and exploiting the metro line, the company still had not signed a contract for ordered services for infrastructure management and maintenance. The company also has not received any advance payment, forcing it to temporarily use charter capital to pay salaries and other related operating expenses.
According to Triet, the payment procedure bottlenecks are mainly because this is a new field and departments had never handled it before. The Department of Construction is still appraising the service pricing plan and has not yet submitted it to the Ho Chi Minh City People's Committee for approval.
"The loss is only temporary and has caused difficulties for the company at some points. However, the company believes that with active support from departments to remove obstacles and the unity of employees, it will meet its targets by the end of the year as planned," Triet told VnExpress on Nov. 27.
Passengers gather at Rach Chiec Station to board the train in December 2024. Photo: Quynh Tran
HURC has set a total revenue target of VND578 billion for this year. Of that, more than VND201 billion is expected to come from ticket sales. Around VND350 billion is expected from ordered public transport services and infrastructure maintenance. This revenue source is based on operating distance and the agreed unit price per kilometer between HURC and the Ho Chi Minh City Public Transport Management Center. The remaining more than VND26 billion is bank deposit interest.
The company expects a pre-tax profit of VND20 million this year, which would end its string of losses from the time it was established in 2019, when it had no revenue, until commercial operations began.
HURC is a wholly state-owned enterprise under the Ho Chi Minh City People's Committee. As of midyear, the company had total assets of more than VND3.46 trillion. It books transport vehicles, including locomotives and railcars, at more than VND1.76 trillion, with the remainder consisting of workshops, depots, automated fare collection systems and platform screen doors. Only a small portion of the company's total assets is in bank deposits.
HURC operates the nearly 20-km Ben Thanh - Suoi Tien metro line, linking the city center with the eastern gateway. This is Ho Chi Minh City's first urban railway project, with a total investment of more than VND43.7 trillion, completed after 12 years of construction. After nearly one year, the company has operated more than 73,310 train trips and served 17 million passengers.
Currently, fares on the metro line range from VND6,000 to VND20,000 per trip, depending on distance and payment method. Passengers can also buy one-day, three-day or monthly unlimited passes priced at VND40,000, VND90,000 and VND300,000, respectively. For pupils and students, the monthly fare is halved to VND150,000.
