EVN reports official 2014 profit

Hanoi (VNA) - Electricity of Vietnam (EVN) reported a profit of more than 800 billion VND (36 million USD) in the year 2014, the Ministry of Industry and Trade (MoIT) said.

This was the figure audited by independent auditing firm Deloitte Vietnam. The electricity tariff and other business figures were also reviewed by the team established by the MoIT, the finance ministry, electricity associations and the Vietnam Standards and Consumer Association. The results were based on checks at EVN and some of its member units.

The previous estimated profit announced by EVN in early 2015 was 300 billion VND (13.3 million USD) due to increasing input costs.

Statistics from the audited report released at a recent conference in Hanoi to announce the electricity input cost revealed that power output in 2014 was 128.63 billion kWh while the power lost was 8.49 percent, which was 0.9 percent lower than the set target of 9.39 percent.

The total cost for power production and trading was 198 trillion VND (8.8 billion USD), or 1,539 VND for every one kWh.

The total amount for power generation was 152.9 trillion VND (6.79 billion USD) while the total cost for power transmission was 10.5 trillion VND (466.6 million USD).

The EVN spent 33.6 trillion VND (1.49 billion USD) for electricity distribution and retail. Meanwhile, the total cost for supporting services and management was 905.1 billion VND (40.2 million USD).

The power sector earned 197.1 trillion VND (8.76 billion USD) from power sales while turnover from other related activities was 1.69 trillion VND (75.1 million USD) in 2014.

Of this, the turnover from financial activities from EVN and National Power Transmission Corporation and power corporations was 1.15 trillion VND (51.1 million USD), and turnover from investment into its corporations was 101 billion VND (4.48 million USD).

However, EVN's Deputy General Director Dinh Quang Tri said the profit was too low when compared with their charter capital of 160 trillion VND (7.1 billion USD).

Tri added that the figure did not take into account the exchange rate difference.

"If EVN had brought in 5 trillion VND in the exchange rate difference, we would have been in a loss in 2014," he said, and added that EVN was asked to pay back the losses in instalments of 10 years to 15 years.

This is the special mechanism for EVN as its power tariffs are stipulated by the government.

According to the report, expenses not accounted for in the electricity cost price was about 4.78 trillion VND (216.48 million USD), as of 2014. This includes losses of 1.68 trillion VND (74.6 million USD) due to exchange rate fluctuations from the National Transmission Corporation, and 642 billion VND (28.5 million USD) from Power Generation Corporation 1.

Tri also confirmed that EVN has no plans for a power tariff increase this year based on estimates of production costs in 2016 as well as supply and demand. In January, the power demand was increased between 6 percent and 7 percent.

However, he noted that in the summer of 2016, EVN would need several solutions to save power as they could not forecast the weather and power capacity.

"We will strive to prevent power tariff rise this year. We always expect stability in our business, and EVN could increase the price only if it is unavoidable," he said.

Following Decision 69/2013/QD-TTg that took effect on January 10, 2014, the average electricity tariff can be revised every six months, following the Government's price frame. There will be at least a 7 percent increase, compared with the current average level.

If input costs increase from seven percent to less than 10 percent, compared with the current level, EVN is allowed to raise electricity tariffs correspondingly after receiving the approval of the MoIT.

Every year, EVN will prepare an electricity pricing scheme to submit to the MoIT and the finance ministry. After considering the production costs, business and production situation of EVN and socioeconomic conditions, the ministries will decide a specific price scheme.

If the electricity tariff needs to be increased by 10 percent or more or higher than the Government's price frame, the MoIT must report the case to the Government after discussing it with the finance ministry.-VNA