TDM - H1 2024 NPAT from water generation completes 51% of full-year forecast, in line with expectation – Earnings Flash
  • 2024-07-18T00:00:00
  • Company Research
  • TDM announced H1 2024’s sales volume of 35.5 million cubic meters (+4.7% YoY), completing 49% of our full-year forecast. This is in line with our 2024F’s sales volume growth of 5%.
  • TDM announced its Q2 2024 revenue of VND187bn (USD7.4mn; +41% YoY) and reported NPAT of VND44bn (USD1.7mn; -20% YoY). For H1 2024, TDM’s revenue was VND293bn (USD11.6mn; +26% YoY) while the NPAT was VND82bn (USD3.2mn; -55% YoY), which fulfill 58% and 41% of our respective full-year forecasts. We attribute the higher 6M revenue to (1) a 4.7% YoY increase in sales volume vs 6M2023 and (2) VND48bn (USD1.9mn) from material trading (vs none last year). Additionally, the substantial slump in the bottom-line earnings is due to (1) TDM’s not receiving cash dividends from its 37% stake in BWE (vs VND94bn - USD3.7mn in H1 2023), (2) a VND18bn (USD0.72mn) provision for potential losses of investments in its associates (Gia Tan Water, Ca Mau Water, and Biwase Quang Binh), and (3) a VND8.5bn (USD0.3mn) unrealized forex loss from its recent USD-denominated loan (USD8mn) at Woori bank (vs none in 2023). TDM’s reported NPAT slightly trails our current expectation.
  • Excluding forex loss, TDM’s H1 20024 NPAT from water generation is VND90bn (USD3.6mn; +1.1% YoY), completing 51% of our current full-year forecast and is in line with our expectation. We attribute the slight increase in NPAT from water generation despite stronger sales volume (4.7% YoY) to the small recognition of financial income in H1 (which should increase in H2).
  • Overall, we see insignificant change to our recent NPAT from water generation forecast. See more in our latest Water Sector Update dated June 27, 2024.  
  • We currently have an OUTPERFORM rating for TDM at a target price of VND54,800/share.

TDM’s H1 2024 results 

VND bn

(unless stated)

Q2 2023

Q2 2024

YoY (%)

H1 2023

H1 2024

YoY (%)

% of Vietcap’s 2024F

Water sales volume

(million cbm)

19.2

20.2

5.0%

33.9

35.5

4.7%

49%

Revenue

133

187

40.8%

234

293

25.4%

58%

COGS

-59

-108

84.6%

-112

-165

47.2%

60%

Depreciation expenses

-37

-37

-0.2%

-73

-73

-0.2%

43%

Gross profit

74

79

6.3%

122

128

5.3%

53%

SG&A expenses

-3

-3

-15.2%

-7

-7

-2.5%

45%

Operating profit

71

76

7.3%

114

121

5.8%

56%

Financial income

2

2

-3.6%

96

4

-95.8%

12%

Financial expenses

-12

-29

145.5%

-17

-34

95.4%

102%

Interest expenses

-6

-2

-67.2%

-10

-6

-37.9%

24%

Net other income/loss

0

0

-28.9%

0

0

-100.0%

N.M.

Profit before tax

61

49

-19.8%

193

91

-52.9%

42%

Income tax expenses

-6

-5

-21.5%

-10

-9

-8.7%

47%

NPAT-MI

55

44

-19.6%

183

82

-55.3%

41%

NPAT from water generation

55

53

-4.1%

89

90

1.1%

51%

Source: TDM, Vietcap


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