The above request was stated in the conclusion announcement on February 14th by the Prime Minister after a working session with the State Capital Management Committee in Enterprises and 19 Corporations and the State-Owned Enterprise Corporation.
During the pandemic period (2020-2022), the aviation industry, including the national flag carrier Vietnam Airlines, was severely affected by market impacts.
According to the consolidated financial report for 2022 published at the end of last year, as of December 31, 2022, Vietnam Airlines’ short-term debts exceeded short-term assets by VND 39,470 billion, negative equity was VND 11,056 billion, and overdue payments amounted to VND 15,396 billion. In the 2022 fiscal year, the company incurred a post-tax loss of VND 11,223 billion.
In 2023, the business situation of Vietnam Airlines improved, but the consolidated post-tax profit was still negative at about VND 5,500 billion. This loss has decreased by half compared to 2022, equivalent to over VND 5,700 billion.
By the end of 2023, Vietnam Airlines’ equity was negative nearly VND 17,000 billion. The accumulated loss of the company reached more than VND 40,000 billion.
According to forecasts, the international market will gradually recover, and the business operations of Vietnam Airlines are expected to yield more positive results in 2024-2025.
Currently, the company has completed the restructuring plan for the 2022-2025 period and is reporting to shareholders and competent authorities for approval. Vietnam Airlines stated that it will restructure its assets and financial investment portfolio to increase income, cash flow, and prepare the necessary conditions for issuing shares to increase equity capital after approval.
The Ministry of Finance is amending the Decree on Investment and State Capital Management in Enterprises, proposing solutions for Vietnam Airlines to divest from Pacific Airlines. This is also one of the contents included in the comprehensive plan to overcome difficulties for the company.
 A Boeing Dreamliner B787-10 aircraft of Vietnam Airlines. Photo: Brandon Chen/Planespotters |
In the conclusion announcement, the Prime Minister assessed that 2024 still poses many difficulties and challenges. Therefore, he demanded that the 19 economic groups and state-owned corporations, which hold a significant amount of the country’s resources, must invest in development, expansion, and efficient production and business. Furthermore, the financial targets, especially the contribution of the state budget to economic growth in 2024, must be higher than in 2023.
To achieve these goals, along with Vietnam Airlines, the Prime Minister requested the State Capital Management Committee to submit plans to the Government Standing Committee for finalizing the Viet Trung Steel Project and the Phase 2 expansion of Thai Nguyen Iron and Steel Plant in March. In the first quarter, the committee must also restructure VEC and Dung Quat Shipyard.
The Government leaders assigned the ministries to create favorable conditions, remove obstacles concerning legal issues related to taxes, land, real estate, and housing, so that the economic groups and state-owned corporations can invest in development. The State Capital Management Committee should study and work with the ministries to find solutions for businesses as soon as possible. The ministries should cooperate in the spirit of national interests, without pushing aside or causing inconvenience or disturbance.
The State Capital Management Committee is required to arrange personnel in the correct positions, ensuring there is no favoritism, corruption, or meddling in personnel work. “Everything must follow the process, regulations, and no one should interfere negatively in personnel work,” stated the Prime Minister’s announcement.
The Vietnam Electricity Group, PetroVietnam, the Vietnam National Coal and Mineral Industries Group, and the Vietnam Oil and Gas Group are tasked with ensuring a large balance of the economy in terms of electricity, oil and gas, and gas in 2024.
In addition, the Prime Minister also requested the Ministry of Industry and Trade to innovate the management mechanism of petroleum business points towards reducing intermediaries and adjusting electricity prices appropriately. This ministry has been assigned to present a draft new Decree on petroleum business in March and develop gas, wind, and solar power prices suitable for market mechanisms, which will be submitted to the Government in the second quarter.
Phuong Dung
