- PLX released weak Q3 2022 results with NPAT-MI of VND98bn — a modest increase compared to Q3 2021’s low base of VND76bn when petroleum consumption plunged due to COVID-19 social distancing measures in Vietnam. In addition, a VND900bn inventory provision writeback was incorporated in Q3 2022. We attribute the main reason for the weakness to actual distribution costs (e.g., storage and transportation) and premiums (the adjustment factor in gasoline/diesel supply contracts) that have been increasing since late 2021, whereas the premium and regulated cost components in petroleum retail prices (to cover costs for petrol distributors) did not increase accordingly.

- In 9M 2022, PLX’s revenue was VND225tn (USD9.2bn; +88.5% YoY) with NPAT-MI of VND312bn (USD12.7mn; -86.0% YoY). The revenue growth in 9M 2022 was due to surging petroleum prices and strong 8% YoY volume growth, while the weak NPAT-MI was due to 1) low premiums and regulated costs, 2) high and volatile input prices hurting PLX’s profit margin, and 3) PLX sourcing petroleum imports (at high prices) to ensure domestic supply. We note that PLX previously announced a 9M 2022 loss of VND780bn (USD32mn).

- The 9M 2022 NPAT-MI completed only 17.1% of our full-year forecast and trailed our expectation. Therefore, we foresee downside risk to our forecasts, pending a fuller review.

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