Hydropower firms report uneven profits in Q3

As of now, more firms in the sector have released their third-quarter (Q3) financial reports with good profit growth.

Along with this, Song Vang Hydropower posted a net profit approximating $59,000 in Q3, a 132 per cent jump on-year, compared to a loss of $185,400 in the same period last year.

The improvement was partly attributed to net revenue surge of 80 per cent on-year thanks to favourable weather conditions in the central region. Meanwhile, its financial costs declined by nearly 30 per cent, and administrative expenses shed by 40 per cent due to cuts in cash management costs during the period.

The hydropower output across the entire system spiked from June to August, growing 13 per cent on-year. Photo: baodautu.vn

Huong Son Hydropower reported a net profit of approximately $708,300, nearly 3.5 times higher than the same period last year.

Similarly, Nuoc Trong Hydropower’s net profit shot up 56 per cent reaching $284,100 rooted on favourable hydrological conditions, meanwhile Su Pan 2 Hydropower saw its net profit soaring 43 per cent, reaching $1.82 million.

Though water levels have risen, hydropower firms’ profits, however, have not increased evenly. There are still grey areas in the picture, with some companies’ profits, and even revenue, seeing a decline due to diverse factors.

For instance, Nam Mu Hydropower saw its Q3’s net profit drop by 45 per cent to only $350,000, despite favourable weather and abundant rainfall.

Explaining to shareholders, the company’s representative said that Nam Mu Hydropower Plant has been in commercial operation for two decades and just ended its power purchase agreement in mid-June.

During the contract renewal negotiations, determining the power sale price took considerable time, and the plant is currently operating under a temporary price based on operational and maintenance costs to sustain production.

Meanwhile, Song Ba Ha Hydropower reported a 43 per cent drop in Q3’s profit. Its total revenue for Q3 fell by nearly 30 per cent due to a nearly 29 per cent drop in its commercial power output.

During the period, its net profit amounted to $5.2 million, equal to 43 per cent of that one year ago. After three quarters, Song Ba Ha Hydropower only posted roughly 40 per cent of its full-year profit target.

There are several reasons for the surge in power generation from hydropower plants in Q3.

According to analysts from VCBS Securities, the El Nino phenomenon has passed, resulting in abundant water flow into reservoirs due to heavy rains.

Moreover, hydropower production costs are currently the lowest compared to other energy sources, giving hydropower plants priority in dispatch.

Earlier, hydropower firms endured a challenging first half (H1) of the year. The hydropower output across the entire system spiked from June to August, growing 13 per cent on-year from an already high base.

The peak season for hydropower sector is stronger than last year, thanks to the effects of La Nina.

The National Oceanic and Atmospheric Administration forecasts that La Nina would continue until March 2025. As such, according to experts from BIDV Securities, the upward trend in hydropower output is expected to continue for the rest of 2024 and into 2025.

BSC experts predict that the net profit of parent companies’ shareholders in the hydropower sector for 2024 could reach $27.8 million, down compared to the same period last year. However, in the second half of the year alone, this figure is expected to reach $18.1 million, a 70 jump compared to H1.

According to state-owned power authority Vietnam Electricity, the total power output of the entire system in the first nine months of 2024 reached 232.6 billion kWh, up 11 per cent on-year.

Notably, hydropower output grew faster than the average, increasing by 15 per cent with 66.6 billion kWh, accounting for 28 per cent of the total. Hydropower output in Q3 of 2024 saw a particularly sharp increase of 35 per cent compared to the same period in 2023.

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