Expressway builder VEC records 20-fold rise in profit after tax

State-owned Vietnam Expressway Corporation (VEC), Vietnam’s top expressway developer, reported a profit after tax of VND155 billion ($6.7 million) in 2021, 20 times higher than in 2020.

Net revenue reached $140.5 million, down 11% from 2020. Cost of goods sold rose by 11% to $47.4 million, resulting in a 19% fall in gross profit to $92.8 million, according to the firm’s annual financial report.

Despite the decline in net revenue and gross profit, the surge in VEC’s profit after tax was due to the sudden increase in the company’s financial income which reached $168 million. Of this, $135.3 million came from exchange rate discrepancies, and $24.3 million was profit from VEC’s short-term deposit.

As of December 31, total assets reached $3.98 billion, a slight increase compared to the beginning of the year. However, liabilities accounted for $3.48 billion or 87% of assets, with long-term debt exceeding $2.66 billion.

VEC’s three biggest creditors currently are Asian Development Bank (ADB) with outstanding loans of about $1.29 billion by the end of last year, Japan International Cooperation Agency (JICA) with over $1.18 billion; and World Bank with over $263.1 million.

The highway giant's financial expenses doubled to $248.7 million in 2021, with loan interest accounting for most of the increase.

Most of VEC’s loan agreements were made to finance high-speed expressway projects like Noi Bai-Lao Cai, Long Thanh-Dau Giay, and Danang-Quang Ngai expressways, with payment periods ranging between 16 to 40 years.

VEC expected revenue of $172.4 million and profit after tax of $18 million in 2022. The Commission for the Management of State Capital at Enterprises has approved an investment of $94.3 million in VEC this year.

Over 12.5 million vehicles utlized VEC's 490 kilometers of roadways in the first quarter of 2022, down 0.9%.