PV OIL, the Vietnam Oil Corporation (MCK: OIL, UPCoM exchange) reported consolidated net revenue of VND 35,794 billion in Q4/2023, an increase of over 45% compared to the same period.
However, the cost of goods sold during the period increased by more than 50% from 2022, reaching VND 35,156 billion. After deducting the cost of goods sold, the gross profit was only VND 637 billion, equivalent to half of the same period.
In the last quarter, all expenses decreased, only the financial expenses increased by over 9%. After deducting all expenses, PV OIL incurred a net loss of over VND 36 billion in Q4/2023, while it made a profit of VND 295 billion in the same period.
Explaining this result, the company stated that in the last 3 months of 2023, crude oil prices continuously decreased, specifically Brent oil prices after reaching the peak on September 27, 2023 ($98 per barrel), only averaged at $73 per barrel in December, a decrease of about $25 per barrel.
Corresponding to the decrease in world oil prices, the retail prices of gasoline and diesel in the country were also adjusted downward by the state at a rate of 11% for gasoline and 16% for diesel after being regulated by the Price Stabilization Fund. Meanwhile, in the same period last year, world oil prices only decreased slightly by about 1-2% and the prices of gasoline and diesel in the country also decreased slightly accordingly.
Although the net revenue increased by 21% compared to the same period last year due to an increase in consumption, the higher increase in the cost of goods sold compared to the increase in revenue (cost of goods sold increased by 24%) caused the gross profit to decrease compared to the same period in 2022. This is the main reason why the company incurred a loss in the last quarter of 2023.
Decrease in world oil prices led to a sharp increase in the cost of goods sold, which is the main reason for PV OIL’s net loss in Q4/2023.
Accumulated throughout 2023, PV OIL achieved a net revenue of VND 102,669 billion and a after-tax profit of nearly VND 628 billion, a decrease of 1.5% and 13% respectively compared to the same period in 2022.
In 2023, the company set a target of VND 50,000 billion in revenue (calculated at a crude oil price of $70 per barrel) and VND 480 billion in after-tax profit. Therefore, although the business results went backward compared to the previous year, PV OIL still exceeded 31% of the annual profit plan and doubled the revenue target.
As of December 31, 2023, PV OIL’s total assets reached VND 38,811 billion, an increase of nearly 35% compared to the beginning of the year. PV OIL’s short-term receivables increased strongly by 62% compared to the beginning of the year, reaching VND 13,094 billion. Among them, short-term receivables from customers more than doubled the value at the beginning of the year, reaching VND 9,175 billion. Currently, Binh Son Refining and Petrochemical Company (BSR) is the largest customer of PV OIL with receivables of over VND 4,200 billion.
At the end of the period, PV OIL held approximately VND 15,270 billion in cash and deposits at banks. Inventory increased by 42% after a year, reaching VND 4,170 billion.
The sharp increase in receivables and inventory caused the cash flow from PV OIL’s business activities to record negative VND 675 billion in 2023, while it was positive VND 3,176 billion in 2022.
In the capital structure, OIL’s total payable debt increased by 57% to over VND 27,112 billion. The total debt at the end of the year was VND 7,055 billion, which is 2.6 times the beginning of the year, mainly short-term loans.
