PetroVietnam tops list of most profitable enterprises hinh anh 1Central technology platform No. 2 at Bach Ho oil field. (Photo: VietnamPlus) 

Hanoi (VNA)
– The Vietnam Oil and Gas Group (PetroVietnam) has become the most profitable corporation in the country, with 50.6 trillion VND (2.17 billion USD) in pre-tax profit in 2018, up 7.5 percent year-on-year.

The group’s effective operation and healthy financial situation have been highly valued by many prestigious domestic and foreign organisations.

Previously, PetroVietnam topped Profit500 list – Top 500 most profitable enterprises in Vietnam in 2018, which was released by Vietnam Report JSC on October 22, 2018. This was the second year that the group had taken the leading position among the top 500 enterprises.

Profit500 is one of the prestigious rankings, honouring businesses with good profitability, and potential to become pillars for the development of Vietnam's economy. It contributes to promoting Vietnamese businesses to domestic and international business community.

Most recently, Fitch Ratings offered PetroVietnam a standalone credit profile at ‘bb+’, and first-time long-term foreign-currency issuer default rating (IDR) at ‘BB’ with a positive outlook.

PetroVietnam’s IDR rating is commensurate with Vietnam's national credit rating (BB/positive outlook). The rating is expected to help the group improve its ability to mobilise capital in the international market, and diversify capital mobilisation sources for its investment projects in the context of government guarantee restrictions.

This is also one of the reliable bases to affirm PetroVietnam's financial capacity and positive business situation, contributing to strengthening the confidence of domestic and foreign investors and financial institutions, and strategic partners, especially in the time when PetroVietnam is speeding up its restructuring.

According to Fitch, PetroVietnam - one of the most important State enterprises in Vietnam - has no difficulty in raising capital.

In a statement, Fitch highlights the robust State linkages with PetroVietnam. The firm's annual targets are set and approved by the Vietnamese Government and its management is State-appointed. PetroVietnam is also Vietnam's national oil company and benefits from exclusive rights to the country’s oil and gas reserves by regulation. Fitch regards the support record as 'Strong'.

Fitch assesses the socio-political implications of a PetroVietnam default as 'Very Strong'. Any disruptions in PetroVietnam's operations would have material implications for the entire energy value chain in Vietnam.

Fitch's assessments are significant to promote PetroVietnam’s position in the international arena because over the past time, the group has encountered numerous difficulties, especially dropping prices of crude oil.

The group’s equitisation and divestment have recorded positive results, contributing to improving its corporate governance and production and business activities.

In 2018, the group completed the initial public offerings (IPOs) of shares of its subsidiaries PetroVietnam Power Corporation (PV Power), PetroVietnam Oil Corporation (PVOIL) and Binh Son Refining and Petrochemical Co Ltd (BSR). Through the successful IPOs, PetroVietnam earned 16.5 trillion VND (over 713.4 million USD), of which the State capital surplus valued at 7.5 trillion VND (324.3 million USD).

Through the equitisation and divestment, PetroVietnam collected 18.6 trillion VND (804.3 million USD), accounting for 83 percent of the country's implementation value. The group’s assets and equity have been well preserved and developed, making it easy for the firm to improve its financial capacity.

PetroVietnam said that it will pay attention to promoting the development of three main fields of oil and gas exploration and exploitation, gas industry, and electricity and petroleum service after 2025 in line with the roadmap approved by the Prime Minister.

In the first eight months of 2019, PetroVietnam earned over 489 trillion VND (over 21 billion USD) in revenue, exceeding the eight-month target by 19 percent, and marking up 80 percent of the plan set for the year.

In the period, the group contributed nearly 69 trillion VND (2.96 billion USD) to the State budget, surpassing the eight-month plan by 14 percent and accounting for 78.8 percent of the yearly target.

PetroVietnam holds interests in all of Vietnam's upstream oil and gas assets, accounts for about a third of the country's refined product output, and supplies gas for power plants which make up about 15 percent of the country's power generation. PetroVietnam also accounts for about 80 percent of Vietnam's fertiliser production.

Its investment is projected to rise significantly to 321 trillion VND (13.95 billion USD) over the next five years, from 38 trillion VND last year. PetroVietnam estimates over half of its expected consolidated capital expenditure (CapEx) and investment will be used to develop its upstream resources, mainly gas fields/.