Petrovietnam drilling subsidiary share price doubles in 8 months

By Dat Nguyen   July 26, 2023 | 08:15 pm PT
Petrovietnam drilling subsidiary share price doubles in 8 months
An oil drilling rig of PV Drilling. Photo courtesy of of the company
Petrovietnam Drilling & Well Services Corporation has seen its share price double since last November when investment fund Dragon Capital increased its stakes in it.

When the VN-Index plunged to around 900 points in November, Dragon Capital kept buying millions of PVD shares to increase its stake to 11.2%.

At the time the company had posted losses for three quarters in a row adding up to VND201 billion ($8.49 million).

PVD bottomed at around VND13,000 in mid-November.

Things started to turn around in the fourth quarter when the company reported a profit of VND54 billion.

In the first quarter of this year it achieved a profit of VND66 billion.

The turnaround came amid increasing oil rig lease rates and recovery in the drilling industry.

Market research company IHS Markit said in the first half of this year rig rates increased globally by 20% year-on-year.

Crude oil prices were steady at $70-80 per barrel and this meant high profits for drilling firms.

Do Danh Rang, deputy CEO of PV Drilling, told VnExpress that there is increasing demand for rigs in the world, especially in the Middle East.

PV Drilling’s lease rates went up 13% year-on-year in the first quarter to $70,000 a day, and all its rigs were operating at maximum capacity according to BIDV Securities.

Rang said the company’s global expansion has proven to be successful.

In the first six months four of its six rigs were operating in Indonesia, Malaysia, Algeria, and Brunei. It has two rigs operating in Vietnam currently and in September will send them to Thailand and Malaysia.

"By the fourth quarter all six rigs of PV Drilling will be operating overseas. In the end of this year and throughout next year, our rigs will be busy."

Its foreign currency loans and strengthening U.S. dollar caused it losses last year.

PV Drilling has loans of around VND3.8 trillion it took for buying rigs, mostly in dollars.

Its interest expenses surged by 54% last year to VND168 billion as the exchange rate differences caused a loss of VND135 billion.

It the first quarter of this year it posted another loss of VND29 billion due to exchange rate volatility.

Rang expects the dollar to weaken this year, reducing PVD’s interest expense.

The company targets revenues of VND5.4 trillion this year, down marginally from 2022, and profits of VND100 billion against a loss of VND155 billion last year.

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