The Vietnam National Petroleum Group (Petrolimex) has reported that its audited combined post-tax profit for 2017 had dropped by more than VND1.23 trillion (nearly US$55 million) compared to 2016.

Petrolimex recorded VND3.9 trillion in its audited combined post-tax profit for 2017, down 24 per cent from the previous year.

The reason was that the growth of cost of goods sold or cost of sales had exceeded its revenue growth by five per cent due to the rapid increase in crude prices.

Cost of goods sold or cost of sales is an accounting term that refers to the direct costs attributable to the production of goods in a company.

This amount includes the cost of raw material to produce the goods along with the direct labour costs. It excludes indirect expenses such as distribution costs and sales force costs.

Global oil had a successful year in 2017, with Brent crude rising by a total of 17.7 per cent to end the year at $66.87 per barrel compared to the 2016-end level of $56.82 per barrel. The figure for US crude West Texas Intermediate was 12.5 per cent.

In addition to this, Petrolimex also noticed its gross profit margin pulled down as the average import duty, based on which the base petrol prices are calculated and adjusted, was lower than the actual import duty for petrol products in some periods of the year.

The group recorded that some of its associate companies had to make corporate tax payments, which were extracted from their tax incentive differences in the previous years, thus reducing Petrolimex’s post-tax profit.

Petrolimex started listing more than 1.29 billion shares on HCM Stock Exchange on April 21, 2017, under code PLX at VND49,390 ($2.2) per share.

The company’s shares have risen strongly since then, peaking at VND93,100 per share on January 25, 2018. PLX closed today down 4.4 per cent at VND76,500 per share from the previous day’s price. — VNS