- 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)
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