PV Gas set for huge profit decrease

Saturday, Apr 18, 2020 08:03

PetroVietnam Gas Corporation JSC (PVGas) expects lower sales and profit for 2020. — Photo courtesy of PV Gas

PetroVietnam Gas Corporation JSC (PV Gas) expects to see massive sales and profit decreases this year.

The firm predicts it will record more than VND66 trillion (US$2.79 billion) in sales and VND66.2 billion in profit after tax for 2020, down 13 per cent and 45 per cent respectively compared to last year.

PV Gas’s management board said in the firm's annual report that it aimed to ensure the progress of investment projects which will secure the use of 9.2 billion cubic metres of gas for local households.

The report said the global economic and political situation, especially the COVID-19 pandemic, meant there were a lot of problems to cope with.

The firm added that the increasing cost of maintaining its facilities, declining sources of gas and lower prices for the products created more problems.

PV Gas's sales and profits plummeted in the first quarter. The firm earned VND17.5 trillion in revenue, down 6.6 per cent from the same period last year while pre-tax profit and post-tax profit also fell about 31 per cent year-on-year to VND2.6 trillion and VND2.1 trillion, respectively.

According to Phu Hung Securities Joint Stock Company (PHS), global oil prices are still unstable due to a sharp decrease in demand caused by the pandemic. Oil prices have plummeted from $60 barrel at the beginning of 2020 to only $20 and fluctuated sharply.

PHS said as the pandemic was still complicated, it would continue to affect production and trading of natural gas, causing potential losses for revenue and gross profit PV Gas.

However, the securities firm also stated that as PV Gas’s growth driver was its exclusive distribution of natural gas in Viet Nam, it should be able to cope. PV Gas has a 100 per cent market share of natural gas and is the top LPG supplier, accounting for 75 per cent of LPG market share.

Gas demand for gas power plants is forecast to continue to grow strongly due to increased demand. In the long term, Viet Nam's LPG market has a lot of potential for developing residential and LPG needs for industrial customers, said the securities firm.

Shares of PV Gas with the sticker of GAS fell by more than 41.5 per cent in the first quarter. However, in the first half of April, along with the recovery of the stock market, it increased by 21.5 per cent.

Yesterday, each share of GAS was rated at VND67,700 on the Ho Chi Minh Stock Exchange. — VNS

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