New super projects starting, PVS shall gain huge profit in 2019?

It is estimated that PVS’s net profit in 2019 will reach VND 1,109 billion, increasing 109% compared to the previous year.

KIS Vietnam Securities JSC (KIS) has just released a prospective evaluation report of PetroVietnam Technical Services Corporation (PVS). According to KIS, PVS is the bright spot of Vietnam oil and gas industry in the short term thanks due to the recovery of profits and direct benefits from upcoming projects.

Stock movement in three years.

Sao Vang – Dai Nguyet project shall ensure the amount of work for PVS in 2019.

Sao Vang – Dai Nguyet is the gas project in Block 05-1b&c – Nam Con Son in offshore Vietnam, far from Ho Chi Minh city 300km to the Southern East. In 2018, PVS has won M&C contract in building center processing rack with the value of 800 million USA. In 2019, profit from this project has contributed 41% of gross profit.

In November 2018, PVS won a contract worth USD 176 million to supply FSO floating storage for Sao Vang - Dai Nguyet Block. The contract will last for 7 years from 2021. KIS has estimated that Sao Vang - Dai Nguyet FSO will contribute a profit of VND 110 billion / year from 2021 onwards.

At the same time, PVS has been also given $320 million EPC contract of Al Shaheen project in Qatar. PVS had to t bid at low prices to compete with other competitors. Therefore, PVS has estimated gross profit margin is only 4%, compared to 7% of normal domestic projects like Sao Vang - Dai Nguyet.

New super projects bidding

Two new projects: Block B project in Malay – Tho Chu, and Blue Whale Project in Song Hong Basin. They are the biggest gas projects in Vietnam with the gas supply capacity reaching 17 billion m3 of natural gas annually.

KIS has estimated that both projects will open bids in the first half of 2020 and the construction phase will begin in the second half of 2020. The total investment is estimated at $ 18 billion.

Huge amount of work will help recover Vietnam's oil and gas industry from recession. KIS estimates that the gross profit in 2020 of PVS will reach VND 1,690 billion.

Dissolution of PTSC- CGGV

PTSC-CGGV Geophysical Survey Co., Ltd. is a cooperation between PVS (51%) and CGG Veritas Services Holding BV (France). PTSC - CGGV is expected to dissolve in early 2019 due to the loss of business activities. The termination of losses (previously VND 200-300 billion / year) from this company will directly improve the gross profit of PVS.

Minh Anh

Tri thuc tre