Oil and gas companies recover strongly in Q1 from last year's losses
Surging international crude oil price on improving demand has helped many oil and gas companies record big profits in the first quarter of this year, after losing in 2020.
In the first quarter financial result, Vietnam National Petroleum Group (Petrolimex, PLX) posted a slight fall of 0.6% in net revenue to nearly VND38.2 trillion (US$1.6 million). However, it was still profitable thanks to a cut in expenses in financial activities and others, and gains in other incomes.
Of which, the company's profit after tax was nearly VND736.2 billion in the first quarter after reporting a loss of VND2.3 trillion in the same period last year.
During the period, Petrolimex's domestic output rose 4.7% year-on-year to 2.27 million m3. Retail sales accounted for 55 - 60% of its total sales but contributed around 80% of its profit.
SSI Securities Corporation (SSI) said that the company's production growth will continue until the first half of the second quarter, boosted by the Government's restriction on illicit petrol, especially in the south.
Similarly, Binh Son Refining and Petrochemical Company Limited (BSR) witnessed its revenue reach VND21 trillion in the first quarter with a profit of over VND1.8 trillion, while it reported a loss of VND2.33 trillion in the same period last year.
The main driving force for the recovery in profit was higher crude prices in the international market and crack spread of gasoline products.
Crack spread is the spread created in commodity markets by purchasing oil futures and offsetting the position by selling petrol and heating oil futures.
PetroVietnam Oil Corporation (PVOIL)'s profit after tax was VND190.6 billion, after losing VND537.7 billion in the same period last year.
Notably, Thu Duc Trading & Import Export JSC (TMC) even reported net profit of more than VND4 billion, nine times higher than that of last year.
Another company witnessing profit rise sharply was Nam Song Hau Trading Investing Petroleum JSC (PSH). The company's revenue was up 10% over last year to more than VND1.7 trillion, resulting in a profit of VND44 billion, 2.1 times higher than that of the same period in 2020.
Even though there were still some companies recording declines in profit or even losses during the first quarter, in general, oil and gas companies' results were quite positive.
With positive oil demand outlook, the oil price is expected to continue to rally. Therefore, there is still more room for oil and gas firms to recover.
SSI forecasted that Brent crude price will trade at an average of US$68 per barrel in 2021, up 62.6% year-on-year, and can even go up to US$70 in 2022.
According to SSI, developed economies are gradually opening again as they have pushed the vaccination rollout. Businesses activities will also recover quickly when countries continue to ease measures to contain COVID-19.
Brent crude was traded at US$74.23 per barrel on June 17, and on track to head toward US$75.