ACV - Earnings surge YoY, bad debt provisions cool down - Earnings Flash
  • 2024-07-29T00:00:00
  • Company Research
  • ACV released its H1 2024 results, posting a 16% YoY increase in revenue and PBT adjusted for FX gain/losses, fulfilling 49% and 58% of our respective full-year forecasts, respectively. We foresee upside potential to our forecasts, pending a fuller review.
  • In H1 2024, ACV’s international passengers recovered 39% YoY to 20 million, in line with our full-year forecast of 43 million.
  • However, the number of domestic passengers dropped 18% YoY to 35 million due to aircraft repairs by domestic airlines and weaker-than-expected consumer sentiment. We anticipate these issues to be alleviated going forward, but still foresee potential downside risk to our current 2024 forecast of 78 million domestic passengers.
  • Foreign arrivals fully recovered in H1 2024, reaching 104% of pre-Covid levels, with Chinese arrivals achieving 76%. 
  • In Q1 2024, ACV recognized a decrease of VND5bn in bad debt provisions, resulting in a total provision balance of VND3.9tn (flat QoQ), beating our expectation of VND1.5tn in provision expenses for 2024F. This indicates a positive signal of airlines’ repayment, supported by a positive recovery outlook.
  • ACV made revaluation FX gains of USD17mn in H1 2024 due to a 5% depreciation in the JPY/VND exchange rate, benefiting ACV’s JPY debt load.

ACV’s H1 2024 results

VND bn

Q2 2023

Q1 2024

Q2 2024

Q2 2024 YoY

H1 2023

H1 2024

H1 2024 YoY

H1 2024/2024F

2024F

Net revenue

4,929

5,644

5,535

12%

9,657

11,178

16%

49%

22,984

Aeronautical revenue

3,415

3,963

3,862

13%

6,715

7,824

17%

49%

16,090

Take-off and landing fees

637

692

682

7%

1,250

1,374

10%

56%

2,471

Non-aeronautical revenue

894

1,006

1,008

13%

1,725

2,013

17%

46%

4,361

ACV’s net revenue *

4,945

4,968

4,869

13%

8,440

9,838

17%

48%

20,514

Gross profit

2,959

3,600

3,460

17%

5,897

7,059

20%

50%

14,062

SG&A

-693

-498

-332

-52%

-1,278

-830

-35%

28%

-2,988

EBIT

2,266

3,102

3,128

38%

4,619

6,230

35%

56%

11,074

Financial income

442

479

827

87%

858

1,306

52%

79%

1,658

Financial expenses

446

-19

-27

-106%

-346

-45

-87%

8%

-584

Net income from associates

80

61

81

1%

132

142

7%

44%

323

PBT

3,236

3,629

3,999

24%

5,266

7,627

45%

61%

12,510

PBT adj. for FX 

3,699

3,546

3,987

8%

6,500

7,532

16%

58%

13,029

NPAT

2,610

2,921

3,228

24%

4,246

6,149

45%

60%

10,266

NPAT-MI

2,608

2,917

3,225

24%

4,241

6,142

45%

60%

10,236

      ACV’s NPAT-MI

N.A

2,594

2,898

N.A

N.A

5,492

N.A

61%

9,040

      State’s NPAT-MI **

N.A

324

327

N.A

N.A

651

N.A

54%

1,196

D&A

608

586

573

-6%

1,165

1,159

-1%

45%

2,565

EBITDA

2,874

3,688

3,700

29%

5,784

7,388

28%

54%

13,640

GPM

60.0%

63.8%

62.5%

 

61.1%

63.2%

 

 

61.2%

SG&A/rev

-14.1%

-8.8%

-6.0%

 

-13.2%

-7.4%

 

 

-13.0%

EBITDA margin

58.3%

65.4%

66.9%

 

59.9%

66.1%

 

 

59.3%

NPM *

N.A

52.2%

59.5%

 

15.4%

55.8%

 

 

44.1%

Source: ACV, Vietcap forecast. Note: (*) Excluding contribution from State-invested aviation assets; (**) NPAT-MI from assets owned by the State (State-invested aviation assets) — the State authorizes ACV to manage these assets (including runways).

 

ACV’s accounts receivable as of H1 2024 (VND bn)

VND bn

Total

Gross doubtful receivable

Net doubtful receivable

All clients

11,381

8,253

4,363

Vietjet Air

3,119

1,702

1,702

Bamboo Airways

2,265

2,265

0

Vietnam Airlines

3,803

3,045

2,659

Pacific Airlines

880

880

0

Source: ACV

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