Why did EVN Genco3 incur significant losses in Q2/2024?

The net profit after tax for the second quarter of 2024, as reported in the separate financial statements, was a negative 295 billion VND, a decrease of 1,339 billion VND compared to the same period in 2023.

According to EVN Genco3, the main reason for this significant loss is that the gross profit from sales and services in the second quarter of 2024 was only 975 billion VND, a decrease of 696 billion VND. This is due to electricity sales being nearly 2,000 million kWh lower than in the same period of 2023.

EVN Genco3 reported a pre-tax loss of VND 290 billion in the second quarter of 2024, a decrease of 122% compared to the same period last year.

Financial income was VND 53 billion, a decrease of VND 275 billion compared to the same period; financial expenses were over VND 1,200 billion, an increase of VND 586 billion compared to the same period last year, mainly due to an increase of VND 620 in exchange rate losses (VND 591 billion loss in Q2/2024, VND 29 billion profit in Q2/2023).

Profit before tax in the second quarter of this year was a negative 293 billion VND, a decrease of 1,536 billion VND, corresponding to a decrease of 197 billion VND in corporate income tax expense in the second quarter of 2024 compared to the same period last year.

The consolidated financial statement reported a net loss of VND 293 billion in the second quarter of 2024, a decrease of VND 1,396 billion compared to the same period in 2023. This was primarily due to a decrease in gross profit from sales and services, resulting in a lower electricity sales volume of 1,915 million kWh compared to the same period in 2023. Financial income also decreased, and pre-tax profit was a negative VND 290 billion, leading to a VND 205 billion reduction in corporate income tax expenses in the second quarter of this year compared to the same period last year.

According to our research, EVN Genco3 has two subsidiaries: Ba Ria Thermal Power Joint Stock Company and Ninh Binh Thermal Power Joint Stock Company.

Specifically, Ba Ria Thermal Power Joint Stock Company (stock code: BTP) announced a net profit of only 3.75 billion VND in the second quarter, a decrease of 88% compared to the same period in 2023. Accordingly, the net profit for the first six months of 2024 is only 13.2 billion VND, a decrease of 73% compared to the 49.2 billion VND recorded in the first half of last year.

Meanwhile, Ninh Binh Thermal Power Joint Stock Company (stock code: NBP) announced a pre-tax loss of VND 659.6 million in the second quarter of 2024. NBP explained that this loss was due to the fixed price in 2024 being VND 139,306/kW/month, while in 2023 the fixed price was VND 143,914/kW/month, equivalent to a 3.31% decrease. Fixed revenue decreased by VND 3.3 billion compared to the PPA contract due to unit shutdowns resulting in unavailability, long-term operation with low efficiency, registration with A0 for unit shutdown for maintenance and repair; and operation not conforming to A0's schedule due to hot weather affecting the vacuum of the units.

Previously, the audited financial report for 2023 of EVN Genco 3 showed that the after-tax profit in the separate financial statement reached VND 1,225 billion, a decrease of VND 952 billion compared to the same period in 2022. The after-tax profit in the consolidated financial statement was VND 1,083 billion, a decrease of VND 1,436 billion compared to 2022.

The after-tax profit for 2023, as reported in the audited consolidated financial statements, was VND 1,084 billion, a decrease of VND 264 billion, or VND 19.6 billion, compared to the profit reported in the unaudited consolidated financial statements for the fourth quarter of 2023.

Thu An