PV Power’s profit up 37 percent in first quarter of 2018

Hanoi (VNA) - PetroVietnam Power Corporation (PV Power) recorded a consolidated net profit of 780 billion VND (34.2 million USD) in the first quarter, a growth of 30.6 percent against the same period of last year.

Of this, the post-tax profit earned by the parent company was over 675 billion VND, up by 37 percent year-on-year.

PV Power reported consolidated revenue of 8.4 trillion VND during the period, up by 12 percent against last year, most of which came from sales of electricity worth 8.1 trillion VND, up by over 1 trillion VND compared to the first quarter of 2017 and accounting for 97 percent of the total revenue.

The cost of goods sold in the first quarter was 7 trillion VND, bringing the gross profit of the company to 1.35 trillion VND, corresponding to a gross profit margin of 16.1 percent, which was significantly higher than 2017’s figure of 14.8 percent.

During the period, PV Power conducted capital transfers generating profits of 3.9 billion VND and paid dividends of 10.7 billion VND. The interest income paid by lender PVCombank was 287 million VND. However, its financial income still fell by 13 percent year-on-year to 68 billion VND due to the difference in exchange rate and lower deposit interest rates.

Other expenses, such as selling expenses and corporate management expenses, saw little change compared to the same period last year, reaching 4.1 billion VND and 110.4 billion VND, respectively.

At the end of the first quarter, PV Power’s total assets reached 63.4 trillion VND, while its liabilities were 34.9 trillion VND.

According to Viet Capital Securities (VCSC), rising electricity demand in the south will ensure high capacity of 65-70 percent for PV Power. At present, all of PV Power’s gas-powered plants are in the south, which is suffering from a severe power shortage.

Electricity consumption in Dong Nai province and Mekong Delta is expected to grow by 11.5 percent and 13.8 percent per year, respectively, during 2016-20. Electricity consumption in the north-central region, where the Vung Tau 1 coal plant is located, is also expected to grow by 11.1-14.8 percent per year.

At the end of April, the Prime Minister approved PV Power to invest in the Nhon Trach 3 and Nhon Trach 4 thermal power plants, which will increase its total capacity by 1.5GW. If PV Power is approved to build Kien Giang 1 and 2 plants, it will increase its capacity by 71 percent by 2023. Other power plants, such as Son My and Mien Trung, will also help increase PV Power’s capacity by 52 percent, and these new plants will provide an additional growth momentum for PV Power in future.

VCSC predicts that PV Power’s after-tax profit in 2018 will grow by nearly 13 percent due to the strong recovery of Nhon Trach 1 and Nhon Trach 2 power plants after reparation and the 19 percent hike in pre-tax profit of Ca Mau Power Plant after maintenance.

PV Power’s shares (with code POW) are being traded around 14,400 VND (63 US cents) per share on the Unlisted Public Company Market.-VNA