Petrolimex posts big fall in profits as global crude price tumbles

May 9th at 09:21
09-05-2025 09:21:05+07:00

Petrolimex posts big fall in profits as global crude price tumbles

The rapid decline in global oil prices, particularly following US President Trump's announcement of new tariffs on imports, has created significant volatility in the market.

A petrol station of Petrolimex. — Photo courtesy of the company

Việt Nam’s leading petroleum distributor, Petrolimex, announced a staggering decline of more than 75 per cent in its profit before tax in the first quarter of 2025, which amounted to just over VNĐ358 billion (nearly US$14 million). 

This sharp decrease compared to the same period in 2024 has raised concerns among investors and market analysts regarding the company's operational challenges. The significant drop in profit is primarily attributed to adverse conditions in the global oil market. 

During the quarter, the price of West Texas Intermediate (WTI) crude oil plummeted from $77.8 per barrel at the beginning of the quarter to $67.04 by the end of the quarter. This decline directly impacted Petrolimex’s cost of goods sold and necessitated increased provisions for inventory devaluation, further straining its financial performance. 

According to the financial report released by Petrolimex, the company’s net revenue for Q1 reached about VNĐ68 trillion, down nearly 10 per cent year-on-year. The cost of goods sold also saw a reduction of nearly nine per cent, totalling VNĐ64.1 trillion, which led to a gross profit decline of 20 per cent.

Financial revenue, primarily derived from interest on deposits, decreased by six per cent. Although interest expenses fell by 15 per cent due to persistently low bank rates, other operational costs have risen. 

Selling expenses increased by 5 per cent, while administrative costs witnessed a 10 per cent hike.

At the recent annual shareholders' meeting, Petrolimex's deputy general director, Trần Ngọc Năm, said that the rapid decline in global oil prices, particularly following President Trump's announcement of new tariffs on imports, has created significant volatility in the market. 

The price of fuel globally dropped sharply, at times exceeding 20 per cent. With regulations mandating companies to maintain a minimum inventory of 20 days, Petrolimex found itself in a precarious position, holding substantial inventory purchased at higher prices just as market prices fell.

He pointed out that while retail prices were dropping, the cost of previously acquired inventory remained high, severely affecting the core petroleum business's profitability for the quarter. Given the current geopolitical complexities and price fluctuations, Petrolimex anticipates that 2025 will be fraught with risks and challenges that are difficult to manage.

To navigate these challenges, the company is implementing a series of strategies, including closely monitoring global oil market trends, especially the impact of US tariffs, to adapt its supply chain accordingly. The company aims to enhance its sales flexibility across all retail channels, including franchising and wholesale distribution.

During the meeting, Petrolimex's shareholders approved a consolidated revenue target of VNĐ248 trillion and a profit before tax goal of VNĐ3.2 trillion for the year, which represents reductions of 13 per cent and 19 per cent, respectively, from the previous year's performance.

On Thursday, the company announced the temporary suspension of General Director Đào Nam Hải, effective immediately until further notice.

The decision, made by the Board of Directors in line with Ministry of Finance guidelines, appoints Chairman Phạm Văn Thanh to temporarily oversee the management of Petrolimex.

Hải, 51, has served as General Director since March 2022 and previously held roles as Deputy General Director and in leadership positions at PJICO and other Petrolimex affiliates.

Bizhub

- 07:59 09/05/2025



NEWS SAME CATEGORY

Vietnam Medipharm Expo 2025 kicks off in Hà Nội

The event is expected to welcome over 12,000 visitors.

Operations start at pace for computer manufacturers

Computer manufacturers and suppliers have ramped up operations in Vietnam, but are set to face new hurdles amid global policy shifts.

Saigon Hi-Tech Park expands supply chain to tackle tariffs

Enterprises operating at the Saigon High-Tech Park are actively expanding supply chains and exploring new markets in response to potential tariffs on Vietnamese...

Vietnam poised to lead in circular textiles with Syre

Swedish firm Syre is setting its sights on Vietnam, aiming to establish the world’s first high-tech circular textile hub in the country.

First batch of Trà Vinh’s organic OCOP coconut sugar exported to US

The Mekong Delta province of Trà Vinh has seen the first official shipment to the US of locally produced 5-star OCOP-rated organic coconut sugar weighing more than...

Việt Nam’s paper and packaging industry embraces green growth at VPPE 2025

The three-day event showcases cutting-edge technology and equipment in the paper and packaging sector, while serving as a key platform for international trade...

Ensuring enough supply of electricity to achieve economic growth

Key measures also involve expediting critical power generation and transmission projects, optimising resource mobilisation, encouraging electricity savings and...

Việt Nam's trade surplus shrinks nearly 60% in first four months of 2025

According to the General Department of Customs, under the Ministry of Finance, Việt Nam's trade surplus declined nearly 60 per cent in the first four months of 2025.

Việt Nam-Singapore Halal Trade Seminar 2025 to take place on May 24

The Singapore Trade Seminar 2025 aims to promote bilateral business cooperation, trade and services within the rapidly growing global Halal market.

Bà Rịa - Vũng Tàu industrial parks attract $1.3B in 2025

Bà Rịa - Vũng Tàu Province’s industrial parks attracted investments of more than US$1.3 billion in nearly 40 new and existing domestic and foreign projects in the...


MOST READ


Back To Top