VIS Rating - An Affiliate of Moody's presents our update on the 2024 full-year financial performance of the top 20 listed power companies by revenue.
Power companies delivered mixed operating results in 2024. Total revenue and net income declined by 0.3% and 26% year-over-year (YoY), respectively. The decline in profitability was driven by rising input prices, with coal increasing by over 20% YoY and natural gas by approximately 7% YoY, coupled with lower hydropower and gas power output. However, the sector’s operating cash flow (CFO) improved due to reduced interest expenses and quicker receivables collection from the main off-taker - Vietnam Electricity Group (EVN).
Buoyed by increasing power demand to support strong economic growth, Vietnam's total power production reached 308.7 billion kWh (10% YoY). The coal power segment remained robust in 2024, with production volume increasing by 18%. Consequently, revenues for several coal power companies surged, including PPC (32% YoY) and NBP (23% YoY). On the other hand, gas power production declined by 17% YoY in 2024 (2023: -10% YoY) due to the depletion of domestic gas fields, which limited the natural gas supply for power generation. As a result, gas power companies reported significant reductions in revenue, such as NT2 (-7% YoY), PGV - Phu My Plant (-22% YoY). Looking ahead, we anticipate the gas power segment's production and revenue to recover in 2025. New plants using imported LNG, set to commence operations in Q3/2025, will boost Vietnam's gas power installed capacity by 20% and reduce reliance on domestic natural gas supply.
“In 2024, despite declining profitability, power companies continued to show strong coverage, driven by operating cash flow improvements. We expect 2025 to be a strong year for the power sector, as several new projects will start commercial operations in 2025, including Nhon Trach 3 and 4 gas power plants, Nam Cum 4 and expansion of Hoa Binh hydropower plants, Vung Ang 2 and Quang Trach 1 coal power plants. These new projects will increase total installed capacity by approximately 6%, enhancing power output and revenue. In addition, expected increases in retail electricity price in 2025 will also boost the sector’s liquidity.”– Le Viet Cuong – Associate Analyst, VIS Rating.
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