REE aiming for almost $400 million in revenue in 2025

REE are aiming at VND10.25 trillion ($397 million) in revenue and VND2.4 trillion ($94 million) in after-tax profit for 2025, an on-year increase of 22 per cent and 21.7 per cent, respectively.

Nguyen Thi Mai Thanh, CEO of REE, said, "The energy sector faced many challenges last year. REE’s major hydropower plants are located in the central region, where there were almost no storms and little rain last year. Only hydropower plants in the south and the north have good hydrological conditions."

In addition, the output assigned under the contract price by the National Load Dispatch Centre is high despite low water levels. Given a failure to meet the output, the company was fined, leading to a possible loss. The contract price would not be relaxed until the end of 2024.

Another reason is that Vietnam Electricity's (EVN) earnings have been delayed due to losses. "The company still works with EVN despite late payment of electricity bills. At one point, EVN owned up to thousands of billions of VND at Vinh Son - Song Hinh Hydropower JSC. However, these problems have since been resolved," Thanh said.

The company is aiming to develop new capacities to ensure a growth rate of 15 per cent this year. This is a golden time for projects in the energy sector, including wind power (mainly concentrated), solar power (on hydroelectric reservoirs), and other types such as electricity storage.

Thanh also revealed the plan to venture into new industries, potentially real estate development along traffic axes like the Metroline system and Ho Chi Minh City Ring Road.

REE also set a goal to raise the total electricity generation from 1,000 MW to 5,000 MW by 2035.

"The company plans to inaugurate a wind power plant with a capacity of 48 MW, generating power from November. Another hydropower venture with a capacity of 30 MW is slated to be completed in 2027. We are also joining the bidding for a wind power venture with a capacity of 176 MW,"said Thanh.

To ensure the annual growth rate target of 15 per cent, REE is considering raising electricity generation capacity and water supply, leasing areas, and securing contracts in the electrical refrigeration engineering sector.

By 2030, REE will cease the payment of cash dividends, only pay out in stock, to conserve liquidity for investment. It is estimated that the company needs to invest $77.5 - $116.3 million per year in the energy sector alone by 2030, needing a total of $3.2 billion to reach a capacity of 2,000 MW by 2030.

In terms of liquefied natural gas, Thanh noted that many investors have invited REE to participate in consortiums, in which the company can hold a ratio of up to 49 per cent and 51 per cent of the capital.

"We are also venturing into electrical engineering to tap into profitable opportunities. The company acts as a contractor. For data centres, REE will build the infrastructure for those in the data centre leasing industry," Thanh said.

Regarding investments in affiliated companies, state shareholders plan to divest capital from Central Hydropower with no investor participation. Thanh noted that the company is genuinely interested in divestment deals, but the valuation is too high. The profit margin is only about 5-6 per cent, so it is not attractive to investors.

Shareholders were also keen on REE’s plans to divest capital and shares in the fields it owns. Thanh revealed that the company will keep its assets intact without plans to divest VIB shares. Its VIB shares remain profitable, up to 60 per cent compared to the original price.

REE expects better business results in the first quarter of 2025 compared to the same period last year as the electricity and water sectors record positive changes.

Also at the AGM, Ashok Ramachandran was elected as a member of REE's Board of Directors for the 2023-2027 term. He is currently the general director of JSW Energy.

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