HÀ NỘI – Bình Sơn Refining and Petrochemical Company Limited (BSR) reported satisfactory business results in the first half of this year after the company enjoyed the self-regulated pricing mechanism for its products.

Ending June, BSR’s net profit totalled over VNĐ3.83 trillion (US$169 million), equivalent to 85 per cent of the 2016’s total after-tax profit which stood at nearly VNĐ4.5 trillion.

The return on equity (ROE), a gauge used to measure a corporation’s profitability, was 11.6 per cent in the first six months of this year. This ratio was 14 per cent in 2016.

According to BSR’s general director Trần Ngọc Nguyên, such an improvement in business result could be attributed to an increased output by over 118 per cent of the Dung Quất oil refinery, as well as the company’s self-pricing mechanism.

Early this year, the government permitted BSR to make its own price mechanism after the company has repeatedly called for support to improve the competitiveness of its products.

“The self-regulated price mechanism has made prices of petrol products of Dung Quất oil refinery plant more flexible and able to compete with imported products,” Nguyên said.

The company’s financial health has also improved with the debt ratio continuously declining. Its total loan value was VNĐ13.6 trillion ending June 2017, down significantly compared to VNĐ14.4 trillion loans in 2010.

Decreased long-term debts also help reduce its interest cost. In 2016, the total interest paid by BSR was VNĐ605 billion, down 63 per cent from 2011. In the first half of this year, interest cost dropped by 18 per cent over the same period of last year.

Its liquidity has been inclined to increase over recent years which indicate its high solvency. By the end of June, BSR’s cash and cash equivalent reached VNĐ15.2 trillion, accounting for 28 per cent of its total assets which help ensure the company’s payment ability and expansion of investment and production.

BSR reported its total assets attained to over VNĐ61.3 trillion by 2016-end, a decrease of an average of 10.5 per cent per year during the period of 2013-16.

The company explained this decline was mainly due to shrinking working capital as a result of slips in global oil prices in recent years as well as high annual depreciation expense of about VNĐ2.3 trillion per year due to large proportion of fixed assets (mainly machinery, equipment and high-tech workshops).

“However, the company’s assets will grow in the coming years following the expansion of the Dung Quất oil refinery, which will be completed by the end of 2021,” Nguyên said and added it will increase the long-term assets while reducing short-term assets.

Two key missions

BSR is implementing two key missions, the first of which is the expansion of the Dung Quất oil refinery at a total cost of up to $1.8 billion. After the upgrade, which is scheduled to be completed by the end of 2021, the plant’s output will increase by 30 per cent to 8.5 million tonnes of crude oil per year, meeting 50 per cent to 60 per cent of domestic demand for petroleum products.

The quality of products will also be improved to satisfy the EURO V standard, raising flexibility of raw material input for the plant.

The second and most important task of BRS is making its first initial public offering (IPO) by the end of this year.

In early June, Bình Sơn Refining and Petrochemical Co Ltd was valued at VNĐ72 trillion ($3.2 billion) at the end of 2015, making it the largest company by market capitalisation implementing equitisation. The size of State holding in the company is almost VNĐ45 trillion.

The IPO is expected to attract big investors as State holding in the company will reduce to below 50 per cent of its charter capital. Many potential investors from Japan, Venezuela, Russia and South Korea have expressed interest in BSR shares. – VNS