Vietnamese coal majors report strong Q1 profits

Major Vietnamese coal firms Cao Son Coal, Vang Danh Coal, Mong Duong Coal and Vinacomin-DeoNai Coal all reported large profits in the first quarter of this year thanks to rising coal prices.

Cao Son Coal JSC recorded after-tax profit of VND87 billion ($3.7 million) in the quarter, up 348% year-on-year.

The company, listed on the unlisted public company market UPCoM as CST, earned net revenue of VND2.38 trillion ($101.2 million), down 7%.

In 2023, Cao Son has set a revenue target of VND9.84 trillion ($418.8 million) and after-tax profit of nearly VND144 billion ($6.13 million).

As of March 31, the company's total assets had stood at VND2.85 trillion ($121.5 million), up 20% from the beginning of the year, of which cash and cash equivalents hit VND1.33 trillion ($56.7 million), up 94%.

CST shares finished at VND19,200 ($0.82) at Friday's close.

Meanwhile, Vang Danh Coal JSC posted net revenue of VND1.87 trillion ($79.66 million) and after-tax profit of VND30.8 billion ($1.3 million) in Q1, down 74% and up 162%, respectively.

A company leader said that in 2023, due to rising global demand for coal, the fluctuating price of thermal coal, and the war in Ukraine, it is more difficult to find sources of imports.

This year, the company, listed on the Hanoi Stock Exchange (HNX) as TVD, has set a revenue target of VND6.29 trillion ($267.67 million) and post-tax profit of VND156 billion ($6.6 million).

As of the end of Q1, the company's total assets had stood at VND2.32 trillion ($98.8 million), down 14% compared to the beginning of the year, of which inventory accounted for VND470 billion ($20 million), up 34%.

On the HNX, TVD was trading at VND16,200 ($0.69) at Friday's close.

Mong Duong Coal JSC recorded after-tax profit of VND14 billion ($596,000) in Q1, up 2.4 times compared to the same period last year, on net revenue of VND665 billion ($28.3 million), up 30%.

As of the end of March, the company's assets had hit VND1.02 trillion ($43.2 million), down 29%, of which cash and cash equivalents were VND5.3 billion ($225,647), up 16%.

On the HNX, the MDC share price hit VND12,200 ($0.52) at Friday's close.

Similarly, Vinacomin-DeoNai Coal JSC recorded net revenue of VND915 billion ($38.9 million), up 4%, and after-tax profit of VND10.8 billion ($459,800), up 93%.

As of the end of Q1, the company's total assets had stood at VND1.56 trillion ($66.33 million), up 6% compared to the beginning of the year, of which inventory accounted for VND194.4 billion ($8.3 million), up nearly 3 times.

The company aims to achieve revenue of VND3.75 trillion ($159.6 million) this year, down 1.4%, and post-tax profit of VND56 billion ($2.4 million), down 9.6%.

On the HNX, the TDN share price stood at VND11,100 ($0.47) per unit at Friday's close.

Coal power, gas power and hydroelectricity are Vietnam's main sources of power. However, in the northern region, there are only two main types of electricity: hydropower and coal power. For hydroelectricity, the weather is entering the El Nino phase, with little rain and poor hydrology, while gas electricity is concentrated in the south.

In this context, thermal power plants with increased outputs help to meet electricity consumption demands. Coal, the main fuel of thermal power plants, is vital to ensuring power supplies.

According to Phung Trung Kien, director of analysis at AIS Securities, China, Japan, South Korea, Southeast Asia, Eastern Europe and Western Europe are the largest coal import markets of Vietnam. China has a serious shortage of coal, especially for power generation.

In 2023, the price of coal and energy commodities is expected to decrease by about 11%, but still at a high level. According to Kien, coal output this year will increase due to huge demand from China and stable demand in other markets. With China reopening, Vietnam's coal industry will benefit with coal exports rising, boosting both revenue and profit.