State corporations incur billions of USD losses
VietNamNet Bridge - 13 state-owned corporations and groups got accumulated losses of VND48.988 trillion ($2.33 billion) last year.

The Electricity of Vietnam (EVN) Group is the "champion" with the loss of VND38.104 trillion.

The Electricity of Vietnam (EVN) Group is the "champion" with the loss of VND38.104 trillion, followed by the Vietnam Shipping Lines Corporation (Vinalines), the Vietnam Petroleum Import Export Corporation (Petrolimex) and the Military Petrol Corporation.

The Government has just reported to the National Assembly the financial condition and business operations of 91 state-owned corporations and groups in 2011.

Compared to 2010, their revenue increased by 25 percent while other basic indicators grew very slightly. Specifically, the equity increased by 9.3 percent, total assets increased by 16 percent and pre-tax profit increased by 12 percent.

By the end of 2011, they brought about VND1,577.3 trillion of revenue, VND135.1 trillion of pre-tax profit. The average rate of return on equity is 18.57 percent.

In contrast, the losses of large groups are very high. Many groups and corporations incurred losses and accumulated losses of tens of trillions dong.

The EVN continued to top for losses when its consolidated losses reached VND2.589 trillion, not including losses due to exchange rate differences of VND11.208 trillion. Ranking second is Petrolimex, with the combined losses of VND2.39 trillion. The combined losses of Vinalines is VND791 billion and it is VND566 billion for the Military Petrol Corporation.

By the end of 2011, the total accumulated losses of 13 corporations and groups was VND48.988 trillion, in which EVN contributed 78 percent when its accumulated losses was up to VND38.104 trillion. According to the report, the EVN’s losses due to power production is VND11.437 trillion and VND26.667 trillion due to the exchange rate differences.

The reports also said that some corporations did not preserve their equity, for example the Vietnam Sericulture Corporation and the Waterway Construction Corporation 604.

The Government's report also showed that the operation of groups and corporations depend largely on loans, resulting in large financial costs and low solvency liabilities.

They also have huge bad debts. The groups and corporations that have bad debts of more than VND100 billion include: the Vietnam National Oil and Gas Group (VND408 billion); Song Da Group VND366 billion; Vietnam Coal and Mineral Group VND353 billion; Vietnam Airlines VND161 billion; Military Telecom Corporation VND133 billion; Vietnam Airport Authority Corporation VND136 billion; and Vietnam Textile and Garment Group VND115 billion.

In 2011, these groups and corporations also invested in five non-core business fields such as securities, investment funds, insurance, banking, real estate, with a total amount of VND23.744 trillion, an increase of VND2.056 trillion over 2010.

Disinvestment from non-core business fields was mentioned in this report but it is considered to be difficult.

US$1 = VND21,000

Translated by Nam Nguyen
From VNE
Vietnam; state-owned groups; losses; EVN; Petrolimex; PetroVietnam; bad debts