Vietnam Electricty returns to profitability

June 21, 2019 | 04:58 pm PT
Vietnam Electricty returns to profitability
EVN has been criticized lately for raising power prices. Photo by VnExpress/Thanh Nguyen.
Vietnam Electricity, the sole power distributor, has reported it was back in the black in 2018 after losing over $90 million in the previous year. 

Its consolidated financial statement released Friday shows after-tax profit of VND6.82 trillion ($293 million) on net revenues of VND338.5 trillion ($14.56 billion), an increase of 12.8 percent.

The net profit margin was 2.01 percent, well within the 3 percent cap set by the government in 2017 to limit electricity tariffs. The cap is based on a formula to estimate final profit margin taking into account costs at each stage and overheads.

Nguyen Xuan Nam, deputy general director of EVN, said the company is in a lot of debt because it needs funds for "investment, production and other business activities." The company has to pay off "relatively high" debts that fall due this year, he said without elaborating. 

As of 2018-end EVN owned VND700 trillion ($30 billion) in assets and had long-term debts of around VND367 trillion ($15.78 billion) and short-term debts of VND122 trillion ($5.25 billion). 

The company has been criticized lately for raising power prices. Last March, two years after the previous hike, it increased tariffs by 8.36 percent. The tariffs have almost doubled in the last decade.

But there have been many complaints that the April electricity bill was two or three times the March bill, and not 8.36 percent higher. EVN claimed it was because of a surge in consumption in a hot summer.

National Assembly delegates raised questions in late May if EVN is able to raise prices indiscriminately because it has no competition.

The Government Inspectorate is now auditing EVN and will publish the results the end of June. 

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