Vinacomin posts 18% increase in H1 turnover, profit declines

Vinacomin is expected to show VND600 billion (US$28.5 million) profits, meeting 30 per cent of this year's target. - File Photo

Vinacomin is expected to show VND600 billion (US$28.5 million) profits, meeting 30 per cent of this year's target.

Vinacomin's Deputy General Director Nguyen Van Bien told a press conference in Ha Noi on Thursday that the low profit was due to increasing taxes and fees imposed on the group.

Bien said that from the beginning of February, tax on natural resources rose two per cent, making the group pay VND1 trillion more in a year.

In addition, it also had to pay more than VND1 trillion a year to get the rights for exploration.

"The increasing taxes and fees, together with unchanged coal prices in the domestic market for the past three years have caused difficulties for Vinacomin," he said.

He added that the high taxes and fees would make the coal sector run out of capital for investment.

He asked the Government to lower taxes and duties, to help the group accumulate capital to develop its coal mines while allowing it to export coal to Japan till 2015.

Vinacomin's General Director Le Minh Chuan said coal exports to China have been halted because of high prices.

Chuan said in the process of restructuring, the group has absorbed nine single member companies into its branches. It has also completed privatisation of two out of six companies.

It withdrew VND1.6 trillion from non-core businesses in the finance and banking sectors.

Vinacomin has ensured jobs for more than 126,000 labourers with an average income of VND7.7 million ($360) each a month, increasing 3 per cent over the same period last year.

He said the group was committed to making the Nhan Co Aluminium project operational by 2015.

Vinacomin is looking to have a turnover of VND105 trillion this year, and produce 37.7 million tonnes of coal with consumption of 35 million tonnes. Of this, coal exports would be 8 million tonnes and 27 million tonnes would be for domestic consumption.

It would improve capacity, lower product prices and complete its construction projects to ensure energy security.

It planned to increase the salaries of workers from 5 to 10 per cent.

Minister of Industry and Trade, Vu Huy Hoang placed high value on the coal sector's achievements in the first half of the year despite the difficulties.

Hoang urged Vinacomin to make greater efforts as coal and electricity industries could affect other sectors such as building materials and fertilisers it was facing.

He asked the group to accelerate its restructuring and focus on its core businesses.