Vietnam Airlines snapped the 16-quarter losing streak in the first quarter of 2024 after recording a net profit of over VNĐ4.4 trillion. — Photo courtesy of Vietnam Airlines

The State Bank of Vietnam (SBV) has issued a new circular on refinancing for credit institutions that provided loans to Vietnam Airlines JSC and restructuring the debt repayment term due to the impact of COVID-19.

The key change is an extension of the refinancing term, which will now allow automatic 5-time extensions at maturity for the remaining principal.

Each extension will be for a period equivalent to the initial refinancing term, with a total maximum refinancing period of six years.

This increased flexibility is aimed at helping Vietnam Airlines stabilise its finances and maintain operations during the pandemic.

Previously, the maximum extension was limited to two times, with a total duration not exceeding three years.

Resolution No 135/2020/QH14 of the National Assembly had authorised the SBV to provide VNĐ4 trillion (US$157.7 million) in refinancing to Vietnam Airlines, with a maximum of 2 extensions allowed.

However, a new Resolution No 142/2024/QH15, passed in June, has now increased the number of permitted extensions to a total of five.

In the first quarter of 2024, Vietnam Airlines reported impressive financial results, with revenue reaching nearly VNĐ28.3 trillion - a year-on-year increase of over 25 per cent.

It also recorded a strong rebound in net profit, which exceeded VNĐ4.4 trillion, marking the end of an extended 16-quarter losing streak.

However, despite these positive developments, the national flag carrier continues to face significant financial hurdles in 2024, particularly as the restructured debt obligations start coming due from July onwards.

Đặng Ngọc Hòa, Chairman of the Board of Directors, said that the company's consolidated profit before tax is projected to exceed VNĐ4.6 trillion in the first half of 2024. But the second quarter is expected to contribute only around VNĐ200 billion in profit, despite being the peak summer travel season.

He said he expected that the airline will gradually overcome its negative equity position, eliminate accumulated losses, and restore its financial health to the levels seen prior to the COVID-19 pandemic.

On the stock market, shares of Vietnam Airlines closed Wednesday with a decline of nearly 4.2 per cent to VNĐ21,700 a share. — VNS