- PVD posted H1 2021 results with revenue of USD72.4mn (-46.5% YoY) and a recurring net loss of USD2.1mn vs net profit of USD3.4mn in H1 2020. These disappointing results were due to 1) the average jack-up day rate dropping 15.2% YoY under high pressure from clients, 2) a jack-up utilization rate of only 74% in H1 2021 vs 89% in H1 2020, and 3) fewer jobs for the well-related services segment. 

- In Q2 2021, PVD had a bad debt provision expense of USD1.5mn — the majority of which came from the overdue receivables of its client KrisEnergy Cambodia.  At end-Q2 2021, PVD had a USD4.1mn receivable from KrisEnergy Cambodia. This provision expense was offset by a non-operating profit of USD1.7mn from the science fund provision reversal.

- In addition, we note that PVD did not collect any bad debt from PetroVietnam Exploration & Production (PVEP) in H1 2021 vs our current forecast of USD4.1mn for full-year 2021.

- These results trailed our forecasts due to both a weaker-than-expected jack-up day rate and well-related services segment — in addition to potentially more provision expenses for KrisEnergy Cambodia’s bad debt in H2 2021. We foresee significant downside risk to our current forecasts, pending a fuller review.