GAS - Results marginally behind our forecasts

- GAS announced its Q3 2023 results with revenue of VND22.1tn (USD907mn; -9% YoY) and NPAT-MI of VND2.4tn (USD97mn; -22% YoY).

- On a QoQ basis, NPAT-MI declined by 25%. This decrease was primarily attributed to a 19% QoQ reduction in estimated gas sales volume, a 21% QoQ increase in SG&A expenses, and a 7x QoQ increase in FX losses. These negative factors outweighed a 16% QoQ rise in the average price of fuel oil, which serves as a benchmark for Vietnam’s gas price. In Q3 2023, GAS booked VND136bn of bad debt provision expenses (under GA expenses). In addition, as of end-Q3 2023, GAS had a total of USD148mn USD-denominated debt (equivalent to VND3.6tn, accounting for 68% of its long-term debt).

- Gross profit margin fell from 18.1% in Q2 to 16.6% in Q3, and 9M 2023 gross profit fulfilled 68% of our full-year forecast. We attribute this slightly weak performance mainly to lower-than-expected volume from cheap gas fields.