POW – Q1 NPAT completes 23% of full-year projection despite huge loss from NT2; slight upside potential evident – Earnings Flash
  • 2024-05-02T00:00:00
  • Company Research
  • POW released its official Q1 2024 results with revenue of VND6.3tn (-16% YoY) and NPAT-MI of VND278bn (-48% YoY), fulfilling 20%/23% of our respective full-year forecasts. The YoY decline in Q1 2024 revenue can be attributed to (1) an 11% YoY decrease in total sales volume, primarily due to substantial plunges in volume from NT1 and NT2 by 99% and 86% YoY, respectively, followed by respective decreases of 40%/34% YoY in hydropower volume at Hua Na and Dakdrinh. The lower output from these four plants outweighed the higher YoY volume from Vung Ang and Ca Mau by 83%/5% YoY, respectively. (2)  Competitive generation market (CGM) prices were lower YoY in Q1, amounting to VND1,500/kWh and representing an 11% decrease compared to the previous year. We believe POW’s Q1 2024 NPAT-MI plunged by 48% YoY mainly due to the losses from Nhon Trach 1, NT2, Dakrinh hydro, and Hua Na hydro (HSX: HNA). Specifically, NT2 suffered a loss of VND158bn in Q1 2024 vs NPAT of VND234bn in Q1 2023. In addition, HNA also suffered a loss of VND4bn in Q1 2024 vs a profit of VND70bn in Q1 2023. We note that the official PBT was 5x higher compared to preliminary numbers.
  • Adjusted/Recurring NPAT-MI was strong, completing 25% of our 2024 forecast, which we attribute primarily to the strong performances of the Vung Ang and Ca Mau power plants. We note that POW has not yet booked an insurance compensation for Vung Ang 1 vs our forecast of VND300bn in 2024.
  • We foresee slight upside potential to our 2024 NPAT-MI forecasts for POW, pending a fuller review, as we expect NT2 will have less loss given potential strong volume in April and May (see more in our NT2 Earnings flash , dated April 21, 2024). We also expect Vung Ang will generate better volume and earnings than expected.  
  • We currently have an OUTPERFORM rating for POW with a target price of VND12,600.

Figure 1: POW's Q1 2024 sales volume

VND bn

Q1 2023

Q1 2024

YoY

% of Vietcap’s 2024F

Output (million kWh)

4,002

3,544

-11%

21%

Ca Mau

1,403

1,471

5%

23%

Nhon Trach 1

262

3

-99%

0%

Nhon Trach 2

1,075

152

-86%

8%

Vung Ang

933

1,708

83%

28%

Hua Na

126

75

-40%

14%

Dakdrinh

203

135

-34%

27%

Source: POW, Vietcap

Figure 2: POW’s Q1 2024 results

VND bn

Q1 2023

Q1 2024

YoY

% of Vietcap’s 2024F

Revenue

7,424

6,243

-16%

20%

COGS

-6,745

-5,866

-13%

20%

Gross profit

679

377

-45%

19%

Selling exp

0

0

N.M.

N.M.

G&A

-126

-116

-8%

13%

Operating profit

552

260

-53%

23%

Financial income

125

101

-19%

16%

      Interest income

110

80

-27%

14%

      FX gains

13

2

-83%

N.M.

      Others

1

19

N.M.

21%

Financial expenses

-140

-154

10%

18%

      Interest expense

-132

-81

-39%

13%

      FX loss

-3

-70

2374%

43%

      Others

-5

-4

-28%

6%

Other non-operating income

153

71

-54%

24%

PBT

690

278

-60%

23%

  - Income tax exp

-40

-62

54%

87%

NPAT before MI

650

216

-67%

19%

  - Minority interests

-116

61

N.M.

99%

Reported NPAT-MI

534

278

-48%

23%

Adjusted NPAT-MI *

406

278

-32%

25%

Source: POW, Vietcap (* Excluding one-off items, compensation for FX loss, and insurance)

Powered by Froala Editor