PetroVietnam Construction JSC at the risk of de-listing

PetroVietnam Construction JSC may have ticked off one of the conditions of mandatory de-listing

According to the financial report for the last quarter as well as the whole year of 2019, PVX's accumulated losses as of the end of December 31 increased to VND3.89 trillion ($169.13 million), making up 97 per cent of the equity (VND4 trillion – $173.9 million).

In the fourth quarter, PVX collected VND316 billion ($13.74 million) in revenue, decreasing by 72 per cent on-year. PVX had to sell its products below cost while expenses remained high, resulting in a net loss of VND81 billion ($3.5 million), half the loss of VND160 billion ($6.96 million) in the last quarter of 2018.

For the whole year of 2019, PVX reached VND1.94 trillion ($84.35 million) in net revenue, down 42 per cent over the same period, and after deducting expenses, the parent company recorded a net loss of VND198 billion ($8.6 million).

This is the third consecutive year of loss for PVX, with losses of VND416 billion ($18.1 million) in 2017 and VND414 billion ($18 million) in 2018, respectively. This is one of the conditions for mandatory delisting under Decree No.58/2012/ND-CP of the government. Previously, PVX also suffered big losses in 2012 and 2013 but managed to “escape” delisting in the last minute.

As of December 31, 2019, the corporation's total accumulated losses increased to VND3.89 trillion ($169.13 million), with short-term liabilities at VND8.2 trillion ($356.5 million), exceeding short-term total assets by VND535 billion ($23.26 million).

The corporation's working capital is insufficient to pay its due debts. Because of this, the audited 2019 semi-annual report raised doubts whether the corporation can continue operating.

Currently, the total assets of PVX shrank to VND9.9 trillion ($430.4 3million), with inventory (VND3.5 trillion - $152.17 million) and accounts receivable (VND3.3 trillion – $143.5 million) account for the largest proportion, accounting for nearly 35.3 and 33 per cent of the assets.

PVX is the EPC contractor of Thai Binh 2 Thermal Power project, one of the key national projects that are running behind schedule. Many former leaders of PVX such as former chairman Trinh Xuan Thanh and former general director Vu Duc Thuan were imprisoned for wrongdoings at this project. PVX is still the general contractor on paper. However, chairman of the Board of Directors of Vietnam Oil and Gas Group (PetroVietnam) said that the group is directly taking part in, directing, and operating all issues.

On the stock exchange, PVX continued to plunge and was only VND1,100 (4.7 US cent) on February 6.