Amid a series of wind power businesses suffering heavy losses, last year the Phong Lieu Wind Power project reported a profit of more than 124 billion VND.
In a recent information disclosure table, Phong Lieu Wind Power Joint Stock Company - the enterprise managing the project of the same name in Quang Tri province - recorded a profit after tax of more than 124 billion VND, an increase of nearly 2.7 times compared to 2021. Thus, on average, this enterprise earned more than 300 million VND per day in 2022.
The increase in profits helped the equity to accumulate by 22.5% to over VND675 billion. As a result, the debt-to-equity ratio also decreased from 2.26 times to 1.68 times last year. Phong Lieu Wind Power currently has a total debt of about VND1,135 billion, down nearly 9%. Of which, the outstanding bond debt is over VND800 billion, down more than 12% and accounting for over 70% of the total debt.
Phong Lieu issues a batch of bonds, with an initial total value of VND914 billion, due in April 2035. The first year's interest rate is 8%, the next period is floating according to the reference interest rate plus 2.9%. Payment period is every 3 months.
Phong Lieu Wind Power Project has a capacity of 48 MW with a total investment of VND 1,600 billion, and was started at the end of 2019. This is one of 84 wind power projects that will be put into commercial operation before November 1, 2021, enjoying a fixed preferential electricity price (FIT price) for 20 years.
Phong Lieu wind power project seen from above. Photo: Quang Tri Newspaper
Phong Lieu reported profits amid heavy losses for many wind power companies. According to statistics from VnExpress, by mid-May, most wind power projects reported to the Hanoi Stock Exchange (HNX) were operating at a loss or had declining profits. Most of this group is concentrated in the South Central region (including the Central Highlands and the South Central Coast) - an area that witnessed a wind power boom, with capacity exceeding planning a few years ago.
The common point of loss-making enterprises is the use of financial leverage through mobilizing a large amount of capital borrowed from corporate bonds with high interest rates (about 9-10.25% per year). The debt-to-equity ratio of this group is 4 times or more, with some enterprises having debt 5-6 times higher than capital. Meanwhile, Phong Lieu only recorded a debt-to-equity ratio of nearly 1.7 times with a bond interest rate of 8% per year, both of which are low compared to other enterprises in the industry.
Siddhartha
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