Major retailer Petrolimex to reduce profit target by 10 times

Petrolimex, Vietnam's biggest gasoline retailer by market share, is seeking shareholder approval to reduce its pre-tax profit target in 2022 from VND3,060 billion to VND300 billion ($12.1 million) due to "force majeure".

The reason behind the adjustment is the global gasoline market situation, the company explained in a document.

Petrolimex also considers increasing the target for revenues this year from VND186,000 billion to VND240,000 billion ($9.67 billion).

In 2022, the unusual fluctuations of oil prices and world energy supply, the operating mechanism related to the base price composition, and the Nghi Son Refinery incident directly and heavily affected Petrolimex, the corporation noted.

Nghi Son, Vietnam's largest refinery Nghi Son in the central province of Thanh Hoa, accounts for 35% of domestic supply. Because of its accumulated losses, the refinery had to reduce output to 80% this January, trigging a fuel shortage in the country.

"Due to force majeure events that are beyond the forecast when formulating our plan, it's necessary to adjust it for 2022," the retailer said.

"In the first nine months of the year, especially at times when the price adjustments were big, there was a phenomenon that some wholesalers, distributors, petrol stations limited sales or stopped selling. Therefore, the demand for gasoline and oil was concentrated on Petrolimex, causing the group's consumption volume to increase sharply across all sales channels," it added.

This forced Petrolimex to import more in a chase to promptly compensate and ensure supply for domestic demand, said the giant with the state holding a 75.87% stake.

In the first nine months of the year, Petrolimex's revenue reached more than VND225,000 billion ($9.07 billion), nearly two times year-on-year and equivalent to nearly 94% of the new target. However, pre-tax profit decreased by nearly five times, reaching only VND614 billion ($24.76 million).

On the Ho Chi Minh City Stock Exchange, the Petrolimex (PLX) shares price hit VND25,100 ($1) a unit at the November 18 session.