ACV hit by exchange rate fluctuations once again

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In the released consolidated financial report for the first quarter of 2017, ACV earned a revenue of VND3.9 trillion ($171.6 million).

Regarding financial expenses, ACV said that the exchange loss in this period was VND647 billion ($28.5 million). Besides, ACV also incurred interest expenses of VND31 billion ($1.36 million). Thus, ACV’s total financial expenses in the first quarter of 2017 were VND682 billion ($30 million). ACV earned an after-tax profit of VND651 billion ($28.6 million).

As of the end of March 2017, ACV’s long-term and short-term borrowings were nearly VND20 trillion ($880 million). A large amount of this was in Japanese Yen lent by the Japan International Cooperation Agency (JICA) for the project on constructing the international passenger terminal in Tan Son Nhat International Airport and terminal T2 in Noi Bai International Airport.

This is not the first time ACV reported losses due to JPY’s fluctuations. Previously, in the second quarter of 2016, the continuous appreciation of JPY had caused an exchange loss of VND1.379 trillion ($60.7 million) for the company. Similarly, in 2015, ACV suffered an exchange loss of VND666 billion ($29.3 million).

As of March 31, 2017, ACV’s total assets were VND44.632 trillion ($1.96 billion). For 2017, it targets a revenue of VND15.152 trillion ($666 million) and a before-tax profit of VND3.551 trillion ($156.2 million).

ACV’s biggest shareholder is the Ministry of Transport (MoT). According to the latest proposal of the Civil Aviation Administration of Vietnam (CAAV), the investment in the construction of new terminals in Tan Son Nhat Airport, including T4 and the terminal serving civil aviation on military land plots and air service works located in the north and southeast areas of the airport, will be financed from private investment. ACV will be in charge of mobilising capital contribution from investors.

ACV’s process of selling stakes to strategic investors started in January 2016. ADP was the only name that was approved by MoT on the list of strategic investors. Since then, there have been three negotiation sessions, but there are several unsolved bottlenecks hampering progress.

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However, in a March 2 meeting with Augustin de Romanet, ADP’s chairman and general director, Minister of Transport Truong Quang Nghia said the ministry would do everything to facilitate ACV and ADP to be able to finalise the deal soon.

MoT requested ACV to submit a detailed report on all the disagreements so that the government can offer solutions soon, especially to the disagreement involving ACV’s operating rights in several airports.

ACV’s shareholder structure will change after the share sale to ADP. In particular, the state will own 75 per cent, strategic investors 20 per cent, and common shareholders 3.47 per cent.