Overview of Q2 Financial Performance in the Oil and Gas Sector

The financial report for the second quarter from PV Gas (GAS) indicates that the company maintains a strong cash position of VND44 trillion (approximately $1.7 billion), reflecting an 8% rise since the beginning of the year. This significant cash reserve positions GAS among the top cash-rich companies on the stock market.

In Q2, GAS reported revenues of VND30 trillion, marking a 25% increase from the same quarter last year. Despite a rise in costs totaling VND4.6 trillion, the company achieved a gross profit of VND5.7 trillion, which is a 32% improvement.

By the end of Q2, GAS recorded a post-tax profit of VND3.416 trillion, an increase of VND220 billion, or 6.8%, from the previous year’s corresponding figure of VND3.196 trillion.

Despite better performance in the second quarter, the total post-tax profit for the first half of 2024 was VND6 trillion, representing a decline of 9% year on year, with total assets valued at VND95 trillion. Notably, the cash position accounted for 46.3% of total assets.

Another significant player in the oil and gas arena, Binh Son Petrochemical Refinery (BSR), reported a cash holding of VND40 trillion (around $1.57 billion). This includes VND26.142 trillion in cash and cash equivalents alongside VND13.822 trillion in matured investments.

The Hoa Phat Group (HPG), owned by billionaire Tran Dinh Long, experienced a notable decline in cash during the second quarter, reporting VND28.3 trillion ($1.1 billion) in cash and equivalents, down from VND34 trillion at the start of the year.

In terms of performance, Hoa Phat’s Q2 results were robust, with revenues reaching VND39.555 trillion – a 34% increase from last year – and a gross profit of VND5.247 trillion, which is a remarkable 64% rise.

For the first half of 2024, accumulated revenue stood at VND71 trillion, up 25.3%, resulting in a post-tax profit of VND6.188 trillion, representing a striking 238% increase.

Several other firms have also reported substantial cash reserves, including Duc Giang Chemicals with VND10.2 trillion in Q2, and Bao Viet Insurance totaling VND97.255 trillion for the first half of 2024.

Opportunities for Growth and Expansion

With significant cash reserves, these companies have the potential to broaden their business operations and embark on major projects worth billions.

Maintaining a large operational scale, Hoa Phat is set to further its growth with the VND85 trillion ($3.5 billion) Dung Quat 2 project located in Quang Ngai. Spanning 280 hectares, it aims to produce 5.6 million tons of steel annually, consisting of 4.6 million tons of hot-rolled coil and 1 million tons of specialized steel.

Described as Hoa Phat’s stronghold, the Dung Quat 2 project highlights billionaire Tran Dinh Long’s ambitions. Once operational, it is expected to boost the group’s revenue by VND80-100 trillion each year.

Long has indicated plans for additional significant investments in Phu Yen, including the Bai Goc Port project (VND24 trillion), HoaTam Industrial Zone (VND13.3 trillion), and the Hoa Phat Iron Cast and Steel complex (VND86 trillion).

Similarly, Duc Giang Chemicals, holding VND10 trillion in cash, is also preparing to amplify its operations with billion-dollar investments.

A noteworthy project for Duc Giang is the development of two Aluminium and Amlumin complexes in Dak Nong, with an investment of VND57 trillion ($2.3 billion), targeting an output of 2 million tons of Aluminium and 300,000 aluminum ingots.

At a shareholders’ meeting in March, Duc Giang’s management emphasized that this project could generate significant revenue annually. The company’s president, Dao Huu Tuyen, noted that their cash position would facilitate project development opportunities across various provinces.

As of July 22, shares of Duc Giang Chemicals (DGC) traded at VND114,000 each, down 13% since mid-June.

According to Tien Phong Securities, Duc Giang is on track for a strong recovery in 2024, benefiting from advancements in global technology investments, bolstered by its leading role in Yellow Phosphorus (P4). An increase in P4 exports is anticipated towards the end of 2024, coinciding with the diversification of suppliers in electric vehicle battery and chip production across East Asia and North America, as part of a China+1 strategy to lessen reliance on Chinese sources.