Petrolimex's management board answer questions from shareholders at the meeting on Friday. — VNA/VNS Photo
Viet Nam National Petroleum Group (Petrolimex) will focus on divestments and restructuring in 2019, implementing unfinished tasks from last year, the company’s management board announced at its annual shareholders’ meeting on Friday.
The main issues include the reduction of State holding in the group to 51 per cent and cutting its stake in Petrolimex Insurance (Pjico) to 35 per cent, as well as completing the merger between PGBank and HDBank.
Petrolimex last year proposed to extend the divestment schedule to 2019-20, with a plan to reduce the State capital rate by issuing shares to raise charter capital. Additional capital is essential to implement its key development projects in the coming years.
The group was developing the specific divestment plan and would submit it to the Government for approval, Petrolimex chairman Pham Van Thanh told the meeting.
In addition, Petrolimex has also proposed to the Government to raise the cap on foreign ownership in the group from 20 per cent to 49 per cent, but has yet to receive approval.
A representative of JX Nippon Oil & Energy, which owns 8 per cent of Petrolimex’s capital, showed their long-term investment plan at the meeting and said they wanted to own 20 per cent of the group’s capital. The Japanese investor will develop plans and consider investment in the future.
Regarding the plan to sell 103 million treasury shares, Thanh said the group was planning and met many investors, including foreign funds and large organisations such as Temasek and JPMorgan, through roadshows. With four consecutive years exceeding business targets, many foreign investors are keen on Petrolimex’s shares, he said.
Challenges in 2019
Petrolimex CEO Pham Duc Thang pointed out some challenges facing the group in 2019, specifically the rapid increase in the number of petroleum traders which has caused steeper competition in prices, affecting the intermediary system and retail channels.
In addition, world oil and gas prices are volatile and unpredictable. In the first nine months of 2018, oil prices increased by 26-38 per cent compared to 2017 and from the middle of October, the price quickly decreased, losing 42 per cent compared to the year’s peak.
Oil volatility has greatly affected the business results of the group in the fourth quarter as well as the whole of 2018, Thang said.
Despite that, Petrolimex fulfilled its 2018 targets with consolidated net revenue of nearly VND192 trillion (US$8.24 billion), exceeding the yearly target by 24 per cent. Pre-tax profit reached VND5.1 trillion ($216.4 million), up 2 per cent over the plan.
This year, the group has targeted total revenue of VND195 trillion and pre-tax profit of VND5.25 trillion, up 2-3 per cent year-on-year. The volume of petroleum products sold is predicted at 12.3 million metric tonnes, equivalent to 95 per cent of the previous year due to the impact of Nghi Son refinery.
Thang said Petrolimex would continue to keep a close watch on world oil prices to flexibly balance sources from domestic refineries and imports.
The company will pay a dividend rate of 26 per cent for last year’s performance, which cost it more than VND2.55 trillion. The dividend rate this year is expected to be at least 12 per cent. – VNS