Petrolimex profit continues to fall

Petrolimex reports falling profit figures for the second consequtive quarter

Notably, according to Petrolimex’s consolidated third quarter business report, the company’s net revenue was VND38.3 trillion ($1.69 billion), up 31 per cent on-year thanks to the increasing global selling price of crude oil. The petroleum business contributed 97 per cent of the company’s total consolidated revenue.

Regarding the whole nine months, Petrolimex’s consolidated net revenue reached VND112.4 trillion ($4.96 billion), equaling 78 per cent of its target for the whole year, with a pre-tax profit of VND3.54 trillion ($156.1 million).

Despite the soaring net revenue, the 3-per-cent decrease in the gross profit margin in the third quarter reduced after-tax profit by 15 per cent on-year, to VND894 billion ($39.4 million).

According to the representative of Petrolimex, in the third quarter alone, the tax on imported petroleum was lower than the existing 10 per cent applicable, impacting Petrolimex’s petroleum business. Besides, the after-tax profit of Castrol BP Perco Co., Ltd., Petrolimex’s joint venture with one of the world's largest energy companies, BP, contributed to Petrolimex’s decrease in after-tax profit.

It is not the first time that Petrolimex has reported dropping profit figures. In the second quarter, it announced a drop of 23 per cent on-year in pre-tax profit in spite of increasing revenue.

Notably, in the second quarter, it earned VND38.5 trillion ($1.69 billion) in net revenue from business activities and services, up 10 per cent on-year. The net revenue for the whole six months was VND74.3 trillion ($3.3 billion), up 26.4 per cent on-year.

However, soaring expenditures in finance, sales, and management decreased its pre-tax profit of the second quarter by 23 per cent on-year to VND1.09 trillion ($48.1 million).

In late August, Petrolimex paid a total of VND3.736 trillion ($165.7 million) in cash dividends for 1.16 billion outstanding shares. With the pay-out ratio of 32.24 per cent, each shareholder received VND3,224 ($0.14) per share.

JX Nippon Oil & Energy currently holds 103,528,476 PLX shares, accounting for 8 per cent of Petrolimex’s outstanding shares. For this, the foreign strategic investor received a cash dividend of VND333.7 billion ($14.7 million) for 2016, tantamount to $14.8 million.

Following the VND9 billion ($399,000) loss in 2014, the biggest fuel distributor in Vietnam looked to sell between 15 to 25 per cent of its stakes to raise its chartered capital and reduce state holding in the group to below 75 per cent.

In April 2016, after nearly two years of negotiations, JX Nippon Oil & Energy officially acquired 8 per cent of Petrolimex’s shares for around ¥20 billion (approximately $183 million). Thereby, it means that JX Nippon Oil & Energy can taste the sweet fruits of its investment after a single year.

Petrolimex officially listed on the Ho Chi Minh City Stock Exchange (HOSE) on April 21, 2017 at VND43,200 ($1.9) per share.

Petrolimex set the target to reach a consolidated revenue of VND143.2 trillion ($6.3 billion) for the whole year, up 16 per cent on-year. However, the pre-tax profit is expected to decrease by 26 per cent, to VND4.68 trillion ($206.3 million), the expectation is based on the existing global selling price of crude oil.

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