State-owned enterprises amass US$134.6 billion in debt

By An Chi - Oct 28, 2017 | 06:00 AM GMT+7

TheLEADERMany state-owned enterprises recorded trillions-of-dong losses and negative profit.

State-owned enterprises amass US$134.6 billion in debt
Ninh Binh Nitrogenous Fertilizer Plant

Many enterprises report losses

According to government’s report on the investment, management and use of state-owned capital nationwide in 2016, there were 583 state-owned enterprises (SOEs) having 100 per cent of their charter capital held by the State, including seven economic groups and 67 corporations.

Enterprises had the total assets of VND3.054 quadrillion (roughly US$134.61 billion), 3.7 per cent higher than 2015; and the total revenue of VND1.516 quadrillion (roughly US$66.82 billion), one per cent lower than the previous year.

The total earnings before tax of SOEs in 2016 was VND139.7 trillion (roughly US$5.156 billion), 14 per cent lower than 2015. The seven State economic groups gained VND78.9 trillion (roughly US$3.48 billion) of earnings before tax, 25 per cent lower than 2015.

Notably, the profit of the Vietnam Oil and Gas Group (PVN) was VND26.52 trillion (roughly US$1.17 billion), 38 per cent lower than 2015. This reduction was due to the decrease in the oil price, leading to the reduction in the revenue and profit of drilling, processing, and distribution as well as in services. The percentage of revenue used to cover expenses in the Russia-Vietnam Joint Venture (Vietsovpetro) increased from 35 per cent to 45 per cent in 2016 under the agreement between the Government of Vietnam and Russia, resulting in a decrease in profit from Vietsovpetro.

Vietnam National Chemical Group (Vinachem) reported a loss of VND335.1 billion (roughly negative US$14.77 million) of earnings before tax in 2016 while the figure for 2015 was VND2.13 trillion (roughly US$94.1 million). The poor performances were attributed to losses at four subsidiaries, namely Ninh Binh Nitrogenous Fertilizer, Habac Nitrogenous Fertilizer & Chemicals, DAP-Vinachem and DAP No 2 - Vinachem.

Increasing inventory levels

According to the consolidated report of SOEs, the total inventory of parent companies and their subsidiaries were VND190.85 trillion (roughly US$8.4 billion) which accounted for seven per cent of their total assets. Some corporations having high levels of inventory included Investment and Industrial Development Corporation, PVN, Viettel, and others.

The absolute value of inventories of some parent companies such as the Saigon Jewelry Company Limited, The Housing and Urban Development Corporation (HUD) was relatively moderate, but the ratio between inventory and total asset was high, at over 30 per cent.

A VND1.5 quadrillion debt to pay

State owned corporations had 1.54 quadrillion VND in total debt (roughly US$67.77 billion) including VND265.3 trillion (roughly US$11.7) in foreign debt, three per cent higher than 2015. The average debt-to-equity ratio in 2015 was 1.22.

The total debt of Vietnam Electricity was VND487 trillion (roughly US$21.47 billion). The figures for PVN and the Vietnam National Coal-Mineral Industries Holding Corporation Limited were VND338.6 trillion (roughly US$14.9 billion) and VND100.7 (roughly US$4.44 billion), respectively.

The accumulated report of four state-owned corporations revealed that the total amount of incurred losses of state-owned corporations including parents companies and their subsidiaries in 2016 was VND1.3 quadrillion (roughly US$57.5 million). Also, the total accumulated losses of 17 corporations reached VND12.5 trillion (roughly US$551.2 million), including VND4.6 trillion (roughly US$202.55 million) of six parent companies’ accumulated losses.