QTP - Q3 2024 NPAT-MI jumps to 6.5x YoY yet falls short of our expectations - Earnings Flash
  • 2024-10-18T00:00:00
  • Company Research
  • QTP released its Q3 2024 revenue result of VND2.4tn (-5% YoY), while reported NPAT-MI was VND76bn (6.5x YoY). Strong NPAT-MI growth was driven by (1) a 37% YoY reduction in depreciation expenses and (2) a 31% YoY decrease in maintenance and other costs, which outweigh (3) a 16% YoY drop in sales volume and (4) a 16% YoY rise in average material costs due to higher coal prices. According to industry players, despite YoY lower sales volume, due to Typhoon Yagi in September 2024, profitability improved as QTP enhanced its generator efficiency, leading to a lower heat rate, allowing less coal to generate the same amount of electricity. Additionally, financial expenses were 89% lower YoY, further supporting reported NPAT-MI.  
  • For 9M 2024, revenue was VND9.0tn (-2% YoY) and reported NPAT-MI was VND464bn (+15% YoY). These results were mainly due to (1) a 35% YoY drop in depreciation expense and (2) a 71% YoY decrease in financial expenses, outweighing (3) a 4% YoY decline in sales volume and (4) a 3% YoY rise in average material costs.
  • QTP delivered the strongest Q3 earnings performance among its peers, with PPC and HND both reporting losses. We attribute QTP’s success to its more efficient turbines and generators, which led to lower production costs to gain profit from the CGM market. 
  • However, the 9M 2024 results achieved only 73% of our full-year revenue forecast and 55% of our NPAT-MI forecast. We see downside risks to our earnings forecast due to (1) higher-than-expected coal prices, (2) lower-than-expected CGM prices, and (3) higher than expected maintenance & other expenses, pending a fuller review. We attribute the higher-than-expected maintenance and other expenses to damage from Typhoon Yagi affecting related infrastructure, as well as the cost of diesel oil used for restarting and running several standby small generators.

QTP’s 9M 2024 results

VND bn

Q3
 2023

Q3 2024

YoY
 %

9M
 2023

9M 2024

YoY %

% of Vietcap’s 2024F

Sales volume (million kWh)

1,551

1,300

-16%

5,308

5,120

-4%

71%

Price spread (VND/kWh)

316

327

3%

316

327

3%

94%

ASP (VND/kWh)

1,616

1,835

14%

1,730

1,768

2%

102%

Average material cost (VND/kWh)

1,301

1,508

16%

1,387

1,434

3%

103%

Revenue

2,507

2,385

-5%

9,211

9,024

-2%

73%

  COGS

-2,445

-2,272

-7%

-8,671

-8,415

-3%

74%

  - In which, depreciation expense

-218

-138

-37%

-662

-428

-35%

71%

  - In which, maintenance & other expenses

-153

-105

-31%

-455

-465

2%

121%

Gross Profit

63

113

81%

540

610

13%

58%

  G&A

-23

-25

9%

-67

-73

9%

61%

Operating profit (EBIT)

39

88

124%

473

536

13%

57%

Financial income

3

1

-70%

20

1

-94%

5%

Financial expenses

-29

-3

-89%

-64

-18

-71%

98%

        In which, interest expense

-13

-5

-61%

-48

-17

-66%

88%

PBT

12

84

589%

425

516

21%

55%

  Income tax expense

-1

-9

1231%

-21

-52

142%

N.M.

Reported NPAT

12

76

553%

404

464

15%

55%

Source: QTP, Vietcap

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