Vietnam oil & gas sector’s Q3 profits up for upstream firms, down for downstream firms

Upstream oil and gas companies in Vietnam reported robust profit growth in the third quarter of this year, but downstream peers were hit by declining oil prices.

Among upstream companies, Vietnam Petroleum Technical Services Corporation, or PTSC (HNX: PVS), posted an after-tax profit of VND192.7 billion ($7.61 million) in Q3, up 34.3% year-on-year, driven by an improved gross profit margin.

Its Q3 net revenue rose 15.42% year-on-year to VND4.82 trillion ($190.5 million).

In the first nine months of 2024, the firm logged an after-tax profit of VND706.7 billion ($27.93 million), a 16.58% year-on-year increase, surpassing its annual profit target by 7%.

PV Drilling (HoSE: PVD) also reported a strong performance with revenue of approximately VND6.48 trillion ($256.1 million) for the first nine months, up nearly 61% increase year-on-year, and an after-tax profit of VND461 billion, up nearly 34%.

In Q3 alone, its after-tax profit reached VND179.6 billion ($7.1 million), up 35% year-on-year.

Petrovietnam Securities (PSI) anticipates upstream companies to continue benefiting from ongoing oil and gas exploration and exploitation activities, especially with the commencement of Block B-O Mon project in mid-September 2024.

This project could bring PTSC $5.8 billion from Mechanical & Construction (M&C) contracts starting this year and a floating storage and offloading contract beginning in 2028, it said, adding that starting later this year, the company may begin recording revenues from Engineering Procurement, Construction and Installation (EPCI) contracts.

Additionally, demand for oil service vessels and operational and maintenance services for floating storage will be a potential source of profit, alongside expanding the energy market, PSI added.

In contrast, a significant downturn in global oil prices has adversely impacted the business results of many downstream companies.

Petrovietnam Oil Corporation (PVOIL), registered on the Unlisted Public Companies Market (UPCoM) as OIL, recorded Q3 revenues of VND31.1 trillion ($1.23 billion), up 29.42% year-on-year. However, its after-tax profit fell 84.2% to VND37 billion ($1.46 million).

In the first nine months of 2024, PVOIL's after-tax profit totaled VND382 billion ($15.1 million), significantly lower than the VND664 billion reported in the same period last year. The company said it faced difficulties in the gasoline and oil business in Q3 as global prices continued to drop, leading to domestic retail price reductions of 16-20%.

Similarly, Petrolimex, listed on the Ho Chi Minh Stock Exchange (HoSE) as PLX, reported net revenue of over VND64.3 trillion ($2.54 billion) in Q3, down 11.17% decrease year-on-year.

While revenue dipped, sale and management expenses expanded 7% and 25%, respectively. PLX booked a profit of VND650 billion ($25.67 million) in Q3/2023 thanks to its divestment from private lender PGBanK. Therefore, its Q3/2024 after-tax profit dropped 82.2% year-on-year to VND130 billion ($5.14 million).

In the first nine months, PLX reported net revenue of nearly VND213 trillion ($8.42 billion) and a pre-tax profit of VND3.2 trillion ($126.5 million), up 3.6% and 11.49% year-on-year, respectively. These results exceeded its respective revenue and profit targets by 13% and 10%.

Binh Son Refining and Petrochemical JSC (UPCOM: BSR), which runs the Dung Quat oil refinery – the first of its kind in the country, posted revenue of VND31.95 trillion ($1.26 billion) in Q3/2024, down 15.4% year-on-year. The company reported a net loss of VND1.21 trillion, a stark contrast to the VND3.24 trillion profit it earned in Q3/2023.

In the first nine months, BSR generated revenue of VND87.06 trillion ($3.44 billion), down 17.47% year-on-year, and made an after-tax profit of VND675 billion, falling 89.1%.

In the midstream sector, companies such as Petroleum Materials JSC (HoSE: COM) and Thanh Le General Import-Export Trading Corporation (UPCoM: TLP) also reported decreases in Q3 profit.

COM's after-tax profit fell 52% year-on-year to VND6.7 billion ($264,822), while that of TLP went down 60% to VND27.9 billion.

Meanwhile, Nam Song Hau Trading Investing Petroleum JSC (HoSE: PSH) recorded a loss of VND183 billion ($7.23 million).

Amidst the general decline, Petrovietnam Gas Corporation (PV Gas) stood out, reporting Q3 revenue of over VND25.25 trillion ($998 million), up 14.13% year-on-year, and an after-tax profit of VND2.58 trillion ($102 million), up 7.2%.

In the first nine months, PV Gas earned revenue of over VND78.6 trillion ($3.1 billion), up 16.67% year-on-year, but suffered a decline of 5.32% in after-tax profit to VND8.5 trillion.