EVN makes sober targets

EVN Finance's general director Hoang Van Ninh said in 2012, the company targeted VND2.325 trillion ($111.7 million) in revenue, down 23 per cent against 2011's actualised figure, a pre-tax profit of VND377 billion ($18 million), equal to 2011's figure and total asset decrease by 17 per cent to VND15.033 trillion ($722.7 million).

"It is really a difficult task for EVN Finance to reach this target," said Ninh, adding that up to late May 2012, the company had a pre-tax profit of VND120 billion ($5.7 million).
In 2011, the company gained VND3.05 trillion ($146 million) in revenue and a pre-tax profit of VND371 billion ($17.8 million), down 19 per cent against 2010 which was caused by a loss of VND126 billion ($6 million) largely from securities investment trading.

In 2011, its total asset also lowered from VND23.3 trillion ($1.1 billion) to VND18 trillion ($865 million) due to a decrease of assets formed from borrowing capital on the inter-bank market.

"In 2011, capital mobilisation in the interbank market faced many difficulties with high interest rates, lowed credit limit and many banks asking for guaranteed assets. Therefore, the company actively decreased its dependence on capital sources from the market 2 [inter-bank market] and raised capital mobilisation from market 1 [from the public] to minimise capital costs," said Ninh.

In 2011, the company's return on equity (ROE) reached 11.3 per cent, the return on assets (ROA) reached 1.2 per cent, capital adequacy ratio (CAR) at 15 per cent. The bad debt ratio stayed at 1.27 per cent.

However, State Bank Hanoi branch deputy chief inspector Nguyen Thi Hoa said EVN Finance's business results were better than they looked.

"Last year saw many unfavourable macroeconomic conditions which badly impacted on the banking sector and many financial organisations faced with liquidity problems," said Hoa.

EVN Finance is the member company under EVN Group, of which the group contributed 40 per cent of the company's total capital, An Binh Commercial Joint Stock Bank 8.4 per cent and Refrigeration Electrical Engineering 1.8 per cent and other shareholders 49.8 per cent.

In 2011, its total capital arrangement value reached VND30 trillion ($1.4 billion), up 150 per cent against 2010 with VND20 trillion ($961 million).

Typical projects are the Sprepok 4A hydropower project, electricity grid and transmission projects and the Lai Chau hydropower project.

EVN Finance chairman Dinh Quang Tri said the company would arrange VND5 trillion ($240 million) for EVN projects in 2012.

"Currently, EVN needs around VND4 trillion ($192 million) per year for developing investment, half of which is from official development assistant (ODA). Because of difficulties for domestically borrowing capital, the company will have to mobilise capital from foreign financial institutions and banks," said Tri.

In 2012, the company plans to scale up chartered capital by an additional VND1 trillion ($48 million) during 2012-2013 via issuing new shares to the strategic shareholders. Currently, EVN Finance has a chartered capital of VND 2.5 trillion ($120 million).