Equity Analysis /

Vietnam Oil & Gas Sector

    Vu Tran
    Vu Tran

    Oil & Gas, Fertilizers

    Rong Viet
    16 September 2019
    Published by

    In this 19-page report on Vietnam's oil & gas sector we provide detailed analysis of PetroVietnam Transportation (PVT) and PetroVietnam Technical Services (PVS)

    Petrovietnam Transportation (PVT)

    New fleets bring growth:

    • 1H2019 reported revenue of VND2,212 bn (+5.6% YoY); NPATMI of VND225 bn (+17.2% YoY)
    • Since 2H2018, PVT has rejuvenated its fleets with 1 crude oil tanker, 1 oil product, 1 bulk shipping and 4 LPG tankers. The gross margin of the transportation segment improved from 13% to 16.3%.
    • The addition of O&M contracts for CPP Sao Vang together with better revenue from O&M for FPSO Leweak Emas have also supported revenue, as well as the gross profit margin.
    • G&A expense remained low.

    The transportation segment is expected to keep growing during 2019-22:

    • PVT is increasing its fleets, which will push the transportation’s revenue to achieve the CAGR of 7% during 2019-2022.
    • New fleets will deliver service for Nghi Son, Long Son and expand more to the international market (LPGsegment).
    • Due to the IMO 2020, the charter rate is forecast to continue its upward momentum.

    Petrovietnam Technical Services (PVS)

    Expected to win other M&C contracts:

    • With the leading position in M&C segment, PVS is expected to win other EPC contracts in the future and Nam Du – U Minh can be the next one.

    Hopefully there will be no more expense from PTSC-CGGV:

    • After recording VND736bn from re-evaluating the asset, we expect there will be no more expense from PTSC-CGGV.
    • Dissolving the PTSC-CGGV will improve the overall gross margin.

    More cash flow from new potential FSO/FPSO:

    • New Oil & Gas projects go online, equivalent to high demand for FSO/FPSO, such as FSO Block B, FPSO Nam Du – U Minh or FPSO Lac Da Vang.