Vietnam: Traded hydropower firms see better results in 2017

Vietnam: Traded hydropower firms see better results in 2017

High rainfall volume and domestic demand have raised hydropower plant
earnings in the first six months of 2017 and promised to lift their
performances in the remaining half, according to Viet Dragon Securities Corp
(VDSC).

Two of the nine hydropower plant operators trading on the local stock
market, Southern Hydropower JSC (SHP) and Se San 4A Hydropower JSC (S4A),
managed to turn a profit in the first half of the year after posting losses
one year ago.

SHP recorded VND221 billion (US$9.82 million) in net revenue in the first
six months, a yearly increase of 69 per cent, and VND22.3 billion in net
profit, a reverse from last year's first-half loss of VND53 billion.

S4A saw its first-half revenue jump 104 per cent year on year to VND121
billion, and its net profit reached VND50 billion was a massive improvement
over the a six-month loss of VND2.2 billion in 2016.

Six other hydropower companies saw their six-month earnings strongly gain,
including Song Ba JSC (SBA), Central Hydropower JSC (CHP) and Thac Mo
Hydropower JSC (TMP).

SBA's revenue surged 166 per cent to VND140.7 billion and its net profit
jumped 500 times from VND100 million to VND54 billion.

CHP saw its net revenue increase by 166 per cent to VND412 billion and net
profit soar 109 times to VND198 billion. TMP posted 80 per cent and 496 per
cent growth rates in its net revenue and profit, which touched VND361
billion and VND159 billion after six months.

Only Thac Ba Hydropower JSC (TBC) reported decreases in its net revenue and
profit after six months. The figures for the company were VND133 billion and
VND65.6 billion, down 4 per cent and 10 per cent, respectively, from the
same period of 2016.

After the first half, nine hydropower plant operators posted VND2.11
trillion in revenue and VND941.7 billion in net profit. Those figures
respectively increased by 73 per cent and 218 per cent year on year.

VDSC said in its first-half report on the hydropower industry that strong
gains in hydropower companies' earnings during the first half of 2017 were
attributed to growing electricity demand across the country and good weather
conditions supporting plants located in the Central and Central Highland
regions.

"Electricity consumption in the first half of 2017 grew by 8.5 per cent and
should grow even faster in the second half, since the Government has shown
their determination to boost GDP growth more aggressively, which will
stimulate higher electricity demand."

Electricity demand grew faster than system capacity could afford, with total
system capacity having increased by 3.9 per cent so far this year.

Still, in the first half of 2017, the amount of rainfall in those areas and
the South was 25-100 per cent and 10-30 per cent higher than the average
multiyear six-month level, boosting those companies' production output.

For the remaining six months of the year, VDSC forecast hydropower companies
"would witness improvement" and "their overall business performance in 2017
will deliver remarkable growth."

Those firms should benefit from the determination of the Government to
achieve GDP growth at 6.7 per cent in 2017 while electricity consumption
growth is often twice as high as the GDP growth to meet the demand of the
growing economy, it said.

In addition, VDSC expects that the oversupply situation last year would not
repeat in the second half of 2017, and electricity prices should be much
higher, boosting those companies' results.

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Link to Original Article:
http://english.vietnamnet.vn/fms/business/183245/traded-hydropower-firms-see
-better-results-in-2017.html

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com