Airports Corporation of Vietnam reports first loss ever

At the meeting with the Ministry of Transport (MoT) on September 5, a representative of ADP sought the MoT’s opinion about ADP’s proposals on determining the rights and role of ACV in managing the state’s asset, the franchise fees, as well as ADP’s leeway to adjust airport service fees. In addition, ADP was concerned about the feasibility of ACV’s joining in the expansion and upgrading of Tan Son Nhat International Airport as well as building Long Thanh International Airport.

If the Ministry gives a sufficient response, by the end of 2016 ADP will become ACV’s official investor.

In the meantime, ACV has announced a loss of VND123.7 billion ($5.57 million) in the second quarter of this year, marking the first negative results since it came into operation, according to the company’s financial report published on August 31.

According to its statistics, in the second quarter of 2016, the corporation reached VND3.263 trillion ($147.1 million) in net revenue. However, the cost of sales amounted to VND1.9 trillion ($85.7 million), making a decline in gross profit. Besides, financial expenditures went up to VND1.4 trillion ($63.1 million), VND1.38 trillion of which arose from exchange rate differences, accounting for 98 per cent of financial expenditures.

By late June 2016, ACV held JPY70.6 billion ($687.9 million) in loans, which was used to build terminal T2 at Noi Bai International Airport and the new international passenger terminal at Tan Son Nhat International Airport.

These are the main expenses responsible for ACV’s first negative result.

ACV, the current operator of civil airports in the country, is one of the key enterprises of Vietnam’s aviation industry. Since it came into operation in early 2012, up to the first quarter of 2016, ACV had yet to report loss. The after-tax profits in the 2012-2015 period stood at an average of VND1.5-2.5 trillion ($67.6-112.7 million) per year.

In its initial public offering, ACV off-loaded 3.47 per cent of its stakes, altogether 77.8 million shares, at the average price of VND14,300 ($0.63) each, on the Ho Chi Minh Stock Exchange on December 10, 2015.

The corporation targeted VND12 trillion ($541.08 million)) in revenue, with a pre-tax profit of VND2.056 trillion ($92.7 million) in 2016.

ACV is the only enterprise managing and running 22 international and domestic terminals in the country, with 65 per cent of its revenue coming from the sales of duty-free goods in airports.

It is also carrying out 19 investment projects, with the total capital of VND5.8 trillion ($261.5 million). Some of its large projects include the expansions of Tan Son Nhat International Airport with a total investment of VND1.06 trillion ($47.8 million), and Phu Quoc Airport, with VND696 billion ($31.4 million), and the construction of Cat Bi International Airport’s parking lot costing VND1.5 trillion ($67.6 million).

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