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|PVOil has just published the financial report in the first quarter of 2020|
PetroVietnam Oil Corporation (UPCoM: OIL) has just published its financial report for the first quarter of 2020. Accordingly, its net revenue reached VND17.684 trillion ($768.87 million), up 4 per cent on-year. However, sales expenses made up 99.7 per cent of its revenue, leading to the profit dropping by 89 per cent on-year to VND64 billion ($2.78 million). The revenue includes VND103 billion ($4.48 million) from financial activities, up 17 per cent on-year.
In addition to the financial cost of VND67 billion ($2.9 million), sales and management expenses were VND430 billion ($18.7 million) and VND186 billion ($8 million), respectively. Moreover, with the VND15 billion ($652,170) losses in joint venture performance, the net deficit of PVOil in the quarter amounted to VND537.7 billion ($23.38 million). Of this, the parent company contributed a loss of VND423 billion ($18.4 million).
Explaining the downturn, the firm said that the rampant fluctuation of global oil prices in the first quarter decreased the amount of local gasoline by 11 per cent, while retail output also fell by 6 per cent. During this time, the government adjusted the retail price six times, bringing current prices at the lowest level since April 2009. Accordingly, Brent crude in the global market plunged by 78 per cent, while local gasoline prices were cut from VND10,000 (44 US cents) to VND9,000 (39 US cents) per litre.
Moreover, the COVID-19 deadlock has hit petroleum distributors badly, including PVOil. In 2020, the firm forecasts a decline of 35 per cent in revenue to VND52.2 trillion ($2.27 billion) based on market predictions in late 2019 with the estimated oil price of $60 per barrel. However, due to the pandemic since late January, Brent crude has dropped to $20 per barrel, down 70 per cent against the end of last year. Consequently, output also fell by 20 per cent on-year and may fall further.