Vietnam oil and gas giant H1 profit surpasses target, topping $1.1bn
Vietnam oil and gas giant H1 profit surpasses target, topping $1.1bn
State-run Vietnamese oil and gas behemoth PetroVietnam (PVN) surpassed an income target in the first half of this year, an impressive result driven by strong earnings from its preferential and exclusive operations against losses from non-core activities.
PVN, fully known as the Vietnam Oil and Gas Group, posted an after-tax gain of VND23.6 trillion (US$1.11 billion) in the six-month period, 19 percent higher than the target assigned by the government, according to a financial report released on July 21.
Total revenue topped VND380 trillion ($17.89 billion), while tax payment to the state budget was at VND85.8 trillion ($4.04 billion), or 61 percent of the government’s full-year target.
Most of PVN’s profits came from the subsidiaries that are allowed to exclusively operate in some sectors, or those that enjoy huge incentives from the government.
The Binh Son Petrochemical Refinery Co, which runs the country’s sole refinery Dung Quat in central Quang Ngai Province, reported H1 net income of VND2.08 trillion ($97.9 million) in the first six months of this year, or 232 percent of its target.
Starting in mid-2012, the government has allowed the cost price of petroleum products at Dung Quat Refinery an additional seven percent import duty, even though they are domestically produced.
Such a preferential treatment contributes greatly to the strong earnings of its operator.
Other PVN subsidiaries, including PetroVietnam Exploration Production Corporation, PetroVietnam Drilling and Well Services Corp, and PetroVietnam Drilling Mud Joint Stock Corporation, also surpassed their income targets in the first six months of this year because these companies have almost no competitors in the sectors they exclusively operate in.
Besides subsidiaries that post billion-dollar earnings, there are many units under PVN that reported modest profits or even incurred losses.
The PetroVietnam Construction JSC suffered $433.8 billion ($20.42 million) losses in the first half of this year. PVN explained that the losses were accumulated from previous years and the construction market remains in difficulties.
The Petrovietnam Energy Technology Corporation and Petrovietnam Oil Corporation are also on the list of loss-making businesses, with six-month losses standing at VND13.3 billion ($626,000) and VND73.3 billion ($3.45 million), respectively.
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