- PVS released robust Q4 2022 results with reported NPAT of VND357bn (USD15mn; +3x YoY) and recurring NPAT-MI of VND357bn (USD15mn; +50.2% YoY), which were driven by revenue recognition from M&C contracts and gross margin improving by 8.3 ppts YoY to 3.0% vs 0.5% in 9M 2022. In addition, PVS reversed a VND135bn warranty provision.

- For 2022, PVS’s recorded revenue of VND16.4tn (USD696mn; +15.6% YoY) and recurring NPAT-MI of VND724bn (USD31mn; +20.5% YoY). We attribute the company’s revenue growth to the strong revenue growth of the mechanics & construction (M&C) and operation & maintenance (O&M) segments at 21.5% and 42.3% YoY, respectively. The M&C segment’s revenue growth came from ongoing international contracts, including the Gallaf – Phase 3 (Qatar) and Shwe (Myanmar) projects. We believe the strong 2022 recurring NPAT-MI growth was due to 1) a 24.3% YoY increase in profit from FSO/FPSO joint ventures (JVs) and 2) improved gross margins for the M&C and O&M segments. We attribute the robust 2022 profit from FSO/FPSO JVs to the FPSO Ruby II’s contribution as this FPSO was leased at the highest day rate (USD92,500) for full-year 2022.

- 2022 revenue and recurring NPAT-MI achieved 112.2% and 126.3% of our respective full-year forecasts and beat our expectations. As a result, we foresee upside risk to our current forecasts, pending a fuller review.

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