* BSR released its Q4 2022 financial results with revenue of VND40tn (USD1.7bn; 17% YoY) and NPAT-MI of VND1.5tn (USD63.5mn; -44% YoY). The stronger revenue was mainly supported by Brent oil prices increasing 12% YoY. However, the decline in NPAT-MI was due to 1) a 71% YoY decrease of the gasoline spread and 2) downtrend of Brent oil prices in Q4 2022, which led to BSR having more expensive inputs compared to outputs. These factors even outweighed a 3.7x YoY higher diesel spread.

* Previously, BSR announced its preliminary 2022 results, which implied a loss of ~VND776bn in Q4 2022. We attribute the huge difference between preliminary and actual NPAT to BSR’s ~VND200bn of inventory provision reversal instead of its initial plan to record more inventory provision expense in Q4 2022. Additionally, the company might not have overbooked its maintenance expense allocation in 2022 for upcoming maintenance in 2023.

* In 2022, BSR’s revenue increased 65% YoY (completing 97% of our full-year forecast) due to 1) Brent oil prices jumping 40% YoY and 2) 7.3% YoY higher sales volume. Additionally, NPAT-MI doubled YoY, which was mainly due to Q2 2022 respective gasoline and diesel spreads of USD27/bbl (3x YoY) and USD36/bbl (9x YoY) as a result of the Russia-Ukraine conflict. 2022 NPAT-MI completed 96% of our full-year forecast and was within our expectation. 

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