PVOIL confirms to continue State stake divestment process

On April 26th, in Ho Chi Minh City, PetroVietnam Oil Corporation (PVOIL) successfully organized 2019 Annual General Meeting of Shareholders. Answering questions from stakeholders on privatization process, PVOIL leaders confirmed that the company’s state stake divestment process will be continued in optimal way, bringing highest benefits to investors as well as enhancing company’s competitiveness in the market.

At the meeting, member of Board of Management, President and CEO Cao Hoai Duong said 2018 laid an important milestone in the development process of PVOIL since it was successfully equitized and converted into a joint stock company from August 1st, 2018.

Overcoming difficulties and challenges in a market with instability and fierce competitiveness, PVOIL completed and even exceeded most of business targets, bringing remarkable growth in compared with 2017 achievements.

In specific, 2018 consolidated revenue was reported at 61,585 billion VND, completing 124% of yearly target, an increase of 2% year on year. Recovery of crude oil price in first three quarters of 2018 contributed to the increasing revenue. Consolidated pre-tax profit in 2018 was recorded 589 billion VND, fulfilling 118% of adjusted target or 3% increase against the same period of last year. Thanks to the bright revenue and profit, last year, PVOIL submitted 9,246 billion to State budget, exceeding target by 28%.

Beside the impressive revenue and profit achievements, PVOIL marked several important milestones: PVOIL exported all of crude oil of Vietnam effectively and safely; providing enough crude oil supply to Dung Quat Refinery; ensuring enough E5 RON 92 gasoline with stabled quality for replacing RON 92 gasoline; boosting sales at retail outlets thanks to applications of the fourth industrial revolution and diversifying services by launching PVOIL Easy, PVOIL Mobile and plans to upgrade services at petroleum stations, petroleum storages; maintaining the retail outlet system and output capacity.

Last year, the corporation’s management capacity was improved, contributing to the business achievements. Image and trademark of PVOIL was also promoted thanks to the upgraded management capacity.

One of issues receiving much attention from investors is business achievements of PVOIL as a joint stock company during 5 final months of 2018. According to audited financial report, five-month period consolidated pre-tax profit of PVOIL was recorded at 83 billion VND, equal to 64% of whole year goal (130 billion VND).

Decrease of 50% oil price in last quarter of 2018, the early months PVOIL operated as a joint stock company, seriously affected the completion of corporation’s target. Low oil price left negative impact to PVOIL’s 5-month profit target. Corporation’s fourth quarter consolidated profit fell to 46 billion VND, a much lower figure against 208 billion VND, 175 billion VND and 160 billion VND of three previous quarters of the same year.

Beside low oil price, proceeding finance arrangements and expenses when converting PVOIL to a joint stock company from one member limited company under State regulations affected profit of the company in the 5-month period.

In specific, consolidated pretax profit fell by 87 billion VND to 83 billion VND; parent company’s pretax profit dropped by 261 billion VND, leaving a loss at 187 billion VND due to the finance investment provisioning plan and bad debt.

Excluding budget for finance provisioning plan and bad debt, PVOIL could have met target for consolidated pretax profit and parent’s company pretax profit decided by shareholders at the first annual general meeting.

In full year of 2018, (7 months as one member limited company, 5 months as joint stock company), PVOIL reported consolidated pretax profit at 589 billion VND, completing 118% of annual adjusted target and equal to 103% of 2017 achievement.

In first quarter of 2019, PVOIL completed revenue and profit targets though it had to keep retail price low following government instruction despite international oil price skyrocketed.

Especially, PVOIL continued strengthening technology application in petroleum retail. From April 3rd 2019, all of company’s petroleum retail outlets introduced PVOIL Easy, helping customers to pay by electronic gift vouchers Got It.

In May, PVOIL will accept payments at petroleum stations via ViettelPay and Vietcombank ATM cards. Being the first and unique petroleum retailing company in Vietnam accepts payments via mobile devices has proved great effort from PVOIL. Adding electronic payment solutions at petroleum stations aims at attracting more customers and boosting sales at the company’s retail outlet system.

Shareholders at the meeting also paid much attention to other issues including implementation of state stake divestment to 35,1%, competitiveness of PVOIL in the market, PVOIL’s operation in Laos, influence of international oil prices to business operation of the corporation…

The concerns of stakeholders were explained clearly by PVOIL leaders and won strong applaud from investors at the meeting. Among the issues, state stake divestment plan to attract strategic investors with financial ability, experience in petroleum business as well as strategy for company’s sustainable development to enhance competitiveness of PVOIL.

According to PVOIL President & CEO Cao Hoai Duong, implementing divestment process, PVOIL will publicize share price to attract big shareholders, but there will be conditions in order to get appropriate investors.

Upon the information, PVOIL’s second biggest stakeholder - SK Energy (South Korea) expressed its interest in state stake divestment plan at the corporation. Vice president of SK Energy - Oh Jong Hoon said, his company plans to make further investment at PVOIL.

Vice CEO of PetroVietnam Nguyen Xuan Hoa, representative for the biggest investor of PVOIL, acknowledged PVOIL efforts in its business development and achievements. He appreciated PVOIL’s plan in applying technology for petroleum trading and gave positive look for development prospect of the corporation in the future.

For future business plan, Hoa suggested PVOIL leaders to pay more attention on mapping out strategy and making forecast to confront with changes in the market and focusing on cutting expenses, increasing revenue, expanding retail outlet system while ensuring the sustainability and long-term effectiveness for the business…

On privatization process, Hoa appreciated SK Energy for its interest in investing in the corporation. He also confirmed that PVN will continue support PVOIL in deploying state stake sale, bringing ultimate benefits to PVOIL and shareholders as well.

After listening to reports, proposals and discussing with PVOIL leaders, shareholders strongly approved all of proposals presented at the meeting. At the meeting, PVOIL got shareholders’ approval for not paying 2018 dividend since the corporation reported loss during the 5 final months of 2018, when PVOIL began operating as a joint stock company.

PVOIL shareholders also approved 2019 business targets with consolidated revenue estimated at 49 trillion VND, an increase of 20% against 2018 target; consolidated pre-tax profit expected at 440 billion VND, a growth at 29% in compared with 2018 target./.

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