Most thermal power companies have reported lower earnings in the third quarter of 2018 as increasing rainfall reduces demand for heat energy.
Cam Pha Thermal JSC (UPCoM: NCP) recorded losses of VND102 billion (US$4.4 million) in the third quarter after having suffered VND201.3 billion in the second quarter.
The losses made over the past two quarters have resulted in accumulated losses of VND303 billion for the firm during the nine-month period.
According to Cam Pha Thermal JSC, the rainfall increased in the third quarter, leading to less demand for heat energy while the company had to suspend its plant operations for maintenance.
The company also had to pay for fixed costs such as amortisation of its fixed assets, lending interest, power plant maintenance and difference in exchange rates.
Those two factors made the firm’s revenue fall 10.2 per cent year on year while its financial and production costs rose by 65 per cent and 5 per cent respectively over one year.
Hai Phong Thermal Power JSC (UPCoM: HND) also encountered the same problems as it recorded a 10 per cent decline in third-quarter revenue, amounting to VND1.76 trillion.
In the quarter, the company posted a loss of VND148 billion while making a profit of VND106 billion in the same time of last year.
After nine months, the company saw its profit drop by about 50 per cent year on year to VND179.8 billion.
Hai Phong Thermal Power JSC explained that as demand for thermal power was low in the third quarter, selling prices for the product were also low.
In addition, the company had to separate one of its turbines for maintenance so its actual production was just 76 per cent of the capacity, leading to low revenue and profits from the power market.
At the end of September, Cam Pha Thermal Power JSC and Hai Phong Thermal Power JSC had VND4.49 trillion and VND7.9 trillion worth of loans respectively.
In other cases, Ba Ria Thermal Power JSC (HoSE: BTP) and Ninh Binh Thermal Power JSC (HNX: NBP) reported losses of VND19.3 billion and VND3.6 billion in the third quarter despite having been profitable in the previous two quarters.
Ba Ria Thermal Power JSC reported VND206 billion in third-quarter revenue, down 44 per cent year on year. The other firm had its revenue fall 11 per cent year on year to only VND2.2 billion.
The two companies suffered losses because their financial and management expenses overwhelmed their revenues.
Another thermal power company, Pha Lai Thermal Power JSC (HoSE: PPC), posted the three-quarter lowest net revenue of VND1.26 trillion, which was down 14.4 per cent year on year.
However, the company was able to remain profitable with its third-quarter net profit rising 7 per cent to VND163 billion due to the strong reduction of financial cost. — VNS