PetroVietnam suffers sharp drop in first quarter revenue

State-owned oil and gas giant PetroVietnam has been hit hard by the global health crisis and falling oil prices

The Commission for the Management of State Capital at Enterprises has recently published its report on the business operations of 19 companies under its control.

According to the report, in the first quarter of 2020, Vietnam Oil and Gas Group (PetroVietnam) has seen its total revenue decrease compared to the same period of 2019.

The report said the total revenue in the first three months of 2020 was VND88.3 billion ($3.84 million), down VND13.194 billion ($573,650) compared to last year. Therefore, PetroVietnam's after-tax income was estimated at VND4.44 billion ($193,000), down VND4.58 billion ($199,130), equivalent to 51 per cent.

It is anticipated that in case the epidemic lasts longer and fuel prices stay low, the total revenue of the 19 groups under the Commission for the Management of State Capital at Enterprises will descend about VND279.767 billion ($12.16 million) in the whole year, which will results in payments to the state budget falling by an estimated VND32.836 billion ($1.43 billion).

Groups under the commission have been heavily affected in recent years, along with the general oil and gas industry. The reasons are the low fuel prices, as well as the effects of the US-China trade war and the global pandemic. These effects reduced the usage of vehicles and manufacturing operations in sectors like tourism and services.

In general, PetroVietnam has suffered from low financial ratios. Particularly in March, the average price of crude oil decreased by $20 (VND460,000), or 33 per cent against month prior. In the first quarter of the year, the average price of oil fell $3.8 (VND89,803) a barrel, tantamount to a 6 per cent decrease compared to the target price of $60 (VND1.38 million) a barrel of the year. Compared to the first quarter in 2019, the average price declined by $9.1 (VND209,300) a barrel, down 14 per cent.

Although the gloomy economic picture has had a significant effect on oil and gas prices, the PetroVietnam's production figures are more optimistic. Particularly, crude oil exploitation exceeded the monthly target by 8.1 per cent, and surpassed the quarterly target by 10.1 per cent and accounted for 26.6 per cent of the annual target.

The production of electricity in March increased by 2.097 billion kWh, exceeding the monthly target by 3.8 per cent, and achieving 100 per cent of the quarterly plan 24.7 per cent of the annual target.

Also, in the previous month, the production of nitrogenous fertiliser was 136,900 tonnes, while in the first quarter production reached 441,800 tonnes, up 5.5 per cent on-year and reaching 28.3 per cent of the annual target.

The group produced 1.149 million tonnes of petroleum in March, exceeding the monthly plan by 1.7 per cent, while in the first quarter, total production was 3.415 million tonnes, surpassed the target by 2.5 per cent and reaching 28.9 per cent of the annual target.