National power utility EVN reports $875 mln loss in 2022

State utility Vietnam Electricity (EVN) has reported a loss of more than VND20.7 trillion ($874.5 million) in 2022, down 33% compared to pre-audit estimates.

According to financial statements audited by Deloitte, EVN's consolidated net revenue in 2022 was more than VND463 trillion ($19.56 billion), up 8% year-on-year. Of this, revenue from electricity sales accounted for more than 98% and the rest from sales of several products and services.

According to the Ministry of Industry and Trade, as the only buyer in the market to resell to customers, EVN has high input costs but selling prices are regulated by the state. This is the main reason that the utility incurs losses.

The ministry said at a meeting late March that a 9.27% increase in power production costs in 2022 caused EVN to lose more than VND36 trillion ($1.52 billion).

A representative of the Electricity Regulatory Authority said that the price of materials (coal, gas) and an escalating exchange rate were reasons for the increase in the cost of buying electricity.

For example, the price of blended coal increased by more than 34-46% compared to 2021, while that of imported coal rose by 163% compared to the 2021 average.

In power transmission, the production cost was 5.56% higher than in 2021. Furthermore, price compensation for electricity production and business costs in communes and island district not yet connected to the national grid was also recorded at nearly VND400 billion ($16.89 million).

At the end of 2022, EVN's total assets stood at over VND666 trillion ($28.1 billion), down more than 5% compared to the beginning of the year. Of this, more than VND100 trillion ($4.22 billion) was in bank deposits, down more than VND30 trillion ($1.27 billion) compared to the previous year.

In 2022, the group earned more than VND3.7 trillion ($156.28 million) in deposit interest, slightly down from VND4.3 trillion ($181.63 million) in 2021.

EVN said that the maintenance of bank deposit balances of member units due to high demand for repayment of principal and interest during the year required them to maintain a sufficient balance and ensure credit credibility for future loans.