Plummeting oil prices in the fourth quarter of 2018 have negatively affected the production and business efficiency of enterprises.
This has increased caution and forced them to set prudent plans for this year.
PetroVietnam Oil Corporation (PV Oil), the second-largest petrol dealer in the country, plans to earn revenue of VND49 trillion (US$2.1 billion), equivalent to 86 per cent of last year’s target. Profit is expected to be VND440 billion, equal to 78 per cent compared to 2018.
Cao Hoai Duong, General Director of PV Oil, told news website ndh.vn on Wednesday that in 2019, PV Oil had set sustainable production and business targets because it could not predict the price of oil.
Duong said on December 31 last year, oil prices fell to US$50.21 per barrel, down by $36 or 42 per cent compared to the year-peak of $86.2 per barrel, recorded on October 6, 2018. Therefore, in December alone, PV Oil lost VND140 billion.
“The steep drop in oil prices from the fourth quarter of last year has pushed the domestic business market into chaos," said Do Manh Binh, Head of the Planning Department of PV Oil.
In the first quarter of this year, the firm still faces difficulties due to the increase of environmental protection taxes on diesel and petrol by VND1,000 to VND4,000 per litre, meaning that if PV Oil sold imported petrol at the end of 2018, they will lose VND1,000 per litre. In January this year, PV Oil lost about VND100 billion.
According to Nguyen Xuan Huyen, Chairman of Binh Son Refining and Petrochemical JSC (BSR), a subsidiary of Viet Nam National Oil and Gas Group (PetroVietnam, PVN) and operator of the $3 billion Dung Quat Oil Refinery in the central province of Quang Ngai, the fluctuation of oil price harmed all oil refineries in the world, including traders and distributors.
The company’s business was also strongly affected by oil prices since October last year. Its gross profit in the fourth quarter of 2018 witnessed a loss of VND812 billion, which made the company’s after-tax profit fall VND1 trillion.
BSR has not released its business plans for 2019.
Meanwhile, the Viet Nam National Petroleum Group (Petrolimex) has not yet officially announced its business results in 2018. However, according to Pham Van Thanh, Chairman of Petrolimex’s Board of Directors, the total revenue of the firm in 2018 was estimated at VND190 trillion.
Consolidated profit was estimated at VND5 trillion, 5 per cent higher than 2017. Thanh said the group expected to maintain a high dividend payout of 25 per cent to 30 per cent. — VNS