POW - Strong coal-fired plant performance in 9M, in line with forecasts - Earnings Flash
  • 2024-10-30T00:00:00
  • Company Research
  • POW announced Q3 2024 revenue of VND6.1tn (USD242mn; +7% YoY) and NPAT-MI of VND400bn (USD16mn; +4x YoY). We attribute the 4x YoY NPAT-MI mainly to a VND340bn (USD13.6mn) net FX gain vs a net FX loss of VND65bn (USD2.6mn) in Q3 2023, in addition to sales volume growth across power plants, except for Vung Ang (due to maintenance for its generator No.2 from mid-August to mid-October). 
  • POW reported 9M 2024 results with revenue of VND21.7tn (USD867mn; +1% YoY) and NPAT-MI of VND1,069bn (USD43mn; +44% YoY), fulfilling 67%/75% of our respective full-year forecasts. These results are in line with our current projections. The almost flat YoY revenue was driven by the nearly flat total sales volume (+2% YoY), in which strong volume expansion from Vung Ang (+33% YoY) offset the plunges in volume in NT2 (-23% YoY) and Nhon Trach 1 (-61% YoY). We attribute the stronger expansion in NPAT-MI vs revenue to (1) a net FX gain of VND157bn (USD6.3mn) vs a net FX loss of VND68 (USD2.7mn) in 9M2023, and (2) 70% lower minorities interest. 
  • 9M core NPAT-MI was VND883bn (USD35.3mn, +26% YoY) completing 65% of our full-year projection. The core earnings are slightly below our forecast, driven by a slightly lower-than-expected sales volume (completing 68% of our projection). 
  • Overall, we see insignificant changes to our 2024 reported NPAT-MI forecast, pending a fuller review as potential lower-than-expected net FX loss might offset slightly lower-than-expected core NPAT.
  • We currently have a MARKET PERFORM rating for POW with a target price of VND13,800/share. 

Figure 1: POW's 9M 2024 sales volume

million kWh

Q3 2023

Q3 2024

YoY

9M 2023

9M 2024

YoY

% of Vietcap’s 2024F

Output

2,805

3,047

9%

    11,145 

    11,416 

2%

68%

Ca Mau

1,015

1,188

17%

      4,114 

4,298

4%

66%

Nhon Trach 1

73

111

51%

         563 

217

-61%

22%

Nhon Trach 2

365

743

104%

      2,494 

1,921

-23%

93%

Vung Ang

1,030

606

-41%

      3,137 

4,169

33%

68%

Hua Na

192

266

38%

         399 

423

6%

77%

Dakdrinh

130

133

3%

         440 

388

-12%

79%

Source: POW, Vietcap

Figure 2: POW’s 9M 2024 results

VND bn

Q3 2023

Q3 2024

YoY

9M 2023

9M 2024

YoY

% of Vietcap’s 2024F

Revenue

5,679

6,061

7%

21,533

21,686

1%

67%

COGS

-5,373

-5,764

7%

-20,078

-20,278

1%

67%

Gross profit

307

297

-3%

1,455

1,408

-3%

60%

Selling exp

0

0

N.M.

0

0

N.M

N.M.

G&A

-149

-169

14%

-483

-480

0%

55%

Operating profit

158

128

-19%

973

928

-5%

63%

Financial income

139

411

196%

385

617

60%

97%

      Interest income

123

122

-1%

330

294

-11%

54%

      FX gains

8

241

2846%

15

243

1567%

N.M.

      Others

7

49

562%

41

80

95%

89%

Financial expenses

-213

3

-102%

-489

-357

-27%

36%

      Interest expense

-134

-96

-28%

-391

-264

-32%

43%

      FX loss

-73

99

-237%

-83

-87

5%

29%

      Others

-7

0

N.M.

-15

-6

-60%

N.M.

Other non-operating income

-2

5

N.M.

142

80

-44%

22%

PBT

82

548

569%

1,011

1,268

25%

85%

  - Income tax exp

-30

-94

218%

-127

-156

23%

181%

NPAT before MI

52

454

766%

884

1,111

26%

79%

  - Minority interests

30

-54

N.M.

-141

-42

-70%

N.M.

Reported NPAT-MI

83

400

384%

743

1,069

44%

75%

Core NPAT-MI *

138

124

-10%

700

883

26%

65%

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

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