PPC - YoY NPAT-MI recovery supported by S6 generator re-operation - Earnings Flash
  • 2025-01-17T00:00:00
  • Company Research
  • PPC released its Q4 2024 results, with revenue of VND1.8tn (-1% YoY) and reported NPAT-MI of VND178bn (+89% YoY). The decline in revenue is due to to a 3% YoY decrease in sales volume. The surge in reported NPAT-MI is due to (1) improved NPAT from power generation, which increased to VND11bn (vs a net loss of VND38bn in Q4 2023), and (2) a 27% YoY increase in dividend income. The improvement in NPAT from power generation is driven by a 36% YoY decrease in maintenance & other expenses as PPC recorded a majority of its S6 Generator repair costs in 2023. This outweighs the 6% YoY increase in average material costs resulting from higher coal prices .
  • For the full year 2024, revenue was VND7.7tn (+32% YoY) and reported NPAT-MI was VND424bn (+12% YoY). We estimate NPAT from power generation at VND99bn, a significant recovery compared to a VND65bn loss in 2023, mainly driven by (1) a 31% YoY increase in sales volume, supported by the re-operation of the S6 generator, which outweighs (2) an estimated 4% YoY rise in average material costs, (3) the lower Pha Lai 1 fixed component, and (4) lower contracted volume ratio of 70% (vs 80% in 2023). However, the 27% YoY decrease in dividend income weighed on reported NPAT-MI growth.
  • The 2024 results beat our expectations, achieving 109% and 131% of our revenue and reported NPAT-MI forecasts. The higher-than-expected revenue is due to higher-than-expected sales volume, while the higher-than-expected reported NPAT-MI is due to  unexpected dividend income from HND and QTP when they announced dividends in December 2024. However, the 2024 NPAT from power generation fell below our expectations due to higher-than-expected maintenance & other expenses.
  • We see insignificant change to our 2025 NPAT forecast, pending a fuller review.

HND (PPC's 27%-stake associate company) reported 2024 NPAT-MI falling below expectations, completing just 70% of our forecast. 

  • In Q4 2024, HND's revenue was VND2.4tn (-7% YoY), with a loss of VND245mn, marking an improvement from a net loss of VND91bn in Q4 2023. The YoY lower revenue is due to YoY lower sales volume, while the reduced net loss is due to (1) a 58% YoY decline in maintenance & other cash costs driven by some major maintenance contracts that were not completed in 2024, delaying the costs to 2025, (2) along with a 48% YoY reduction in depreciation expenses.
  • For the full year 2024, HND’s revenue was VND11.0tn (-4% YoY) and reported NPAT-MI was VND422bn (+1% YoY). The relatively flat reported NPAT-MI is mainly due to (1) a 41% YoY reduction in depreciation expenses, (2) lower maintenance & other expenses, offsetting (3) lower YoY sales volume, and (4) lower GPM due to higher coal costs.

PPC’s 2024 results

VND bn

Q4

2023

Q4

2024

YoY
 %

2023

2024

YoY
 %

of Vietcap’s 2024F

Sales volume (million kWh)

976

948

-3%

3,150

4,138

31%

108%

Price spread (VND/kWh)

379

167

-56%

289

239

-17%

82%

ASP (VND/kWh)

1,814

1,694

-7%

1,846

1,856

1%

101%

Average material cost (VND/kWh)

1,435

1,527

6%

1,556

1,617

4%

104%

Revenue

1,770

1,750

-1%

5,814

7,681

32%

109%

     COGS

-1,769

-1,686

-5%

-5,777

-7,451

29%

110%

     - In which, maintenance & other expenses

-297

-178

-40%

-617

-480

-22%

119%

Gross Profit

1

64

6316%

36

230

531%

75%

     G&A

-41

-49

19%

-117

-146

25%

115%

Operating profit (EBIT)

-40

15

N.M.

-80

84

N.M.

46%

Net interest income

3

-1

-138%

19

-2

-110%

-57%

Dividend income

132

167

27%

445

326

-27%

184%

Others

1

0

-99%

-2

27

N.M.

N.M.

PBT

95

181

89%

381

434

14%

121%

     Income tax exp

-1

-2

117%

-1

-10

827%

28%

Reported NPAT

94

178

89%

380

424

12%

131%

NPAT from power generation *

-38

11

N.M.

-65

99

N.M.

67%

Source: PPC, Vietcap (*Vietcap estimate NPAT from power generation = Reported NPAT - Dividend income)

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