EVN says handled huge losses, raises doubt for $1 bln profit

EVN says handled huge losses, raises doubt for $1 bln profit

The Electricity Group of Vietnam (EVN), the country’s sole power distributor, hinted during a Friday meeting that they posted a VND4.4 trillion profit in 2012 and in the same year managed to handle VND18.2 trillion out of the VND38 trillion losses accumulated since 2011.

This has sent analyst and economic experts to doubt that the state-run utility raked in huge net incomes of around VND22 trillion, or roughly $1 billion, in 2012.

At a media meeting on Friday, the Ministry of Industry and Trade publicized the electricity cost price of EVN, but rejected question for EVN net incomes in 2012 and 2013.

Under an order from the Prime Minister, EVN should have its electricity cost price confirmed by the industry and trade and finance ministries to be allowed to hike power prices. The production cost must also be made public before the price increase is made.

According to the industry ministry, the power cost price in 2012 was VND1,322.55 per kWh, and the earnings of EVN that year were VND4.4 trillion. Also in 2012, the accumulated losses of EVN dropped to VND19.8 trillion, while just a year earlier, the figure was VND38 trillion.

This means VND18.2 trillion of the accumulated loss has been handled by EVN, while it still managed to report a VND4.4 trillion profit, suggesting that the real profit is much larger than just VND4 trillion.

But EVN chief refused to comment on the real net income of 2012.

Dinh Quang Tri, its deputy general manager, only confirmed that the accumulated loss in 2011 was as much as VND38 trillion, with VND12 trillion came as the company had to general power by fuel, and VND26 trillion from the forex rate differences.

Refusing to reveal how much the real net income was before handling the accumulated loss, Tri only said “fortunately, in 2012, supply from hydropower plants has soared, enabling EVN to make profits.”

Profits must be announced

Associate Professor and Doctor Ngo Tri Long, a price expert, said EVN could have enjoyed VND22 trillion worth of profits in 2012.

“That’s why they could handle the VND18.2 trillion loss while maintaining the VND4.4 trillion profit,” he said.

“Are EVN chiefs afraid that posting huge profits are inappropriate?” Long said, referring to the common lament of “incurring losses” EVN cited whenever it asked to increase power prices.

But Long said EVN should treat profits as good news as members of the public are unhappy seeing the state utility repeatedly posted losses.

“EVN should publicize its real profits to delight the public,” Long said.

As for the financial figures for 2013, Tri said EVN’s revenues this year are estimated at VND172 trillion, or around $8 billion, while profit would be only VND120 billion.

This is the profit left after EVN continue to handle the accumulated loss. The accumulated loss should be completely handled by the end of 2015 as ordered by the Prime Minister, Tri said.

But again, he did not say anything about the net income excluding the accumulated loss amount.

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