EVN's outstanding debt exceeds 306 trillion VND.

EVN has suffered heavy losses for two consecutive years, and its high debt levels have put significant pressure on the company to pay substantial interest expenses. (Photo: EVN)

25% of cash "vanished".

Vietnam Electricity Group (EVN) has just experienced two years of heavy losses, with a consolidated after-tax loss of VND 20,743 billion and a net loss of VND 22,256 billion in 2022; the cumulative consolidated loss for the first six months of 2023 reached VND 29,107 billion, and the parent company lost VND 32,055 billion in the first six months. For the whole of 2023, the Group expects to continue incurring losses due to high cost of goods sold and electricity purchase prices.

According to EVN's consolidated financial statements for the second quarter of 2023, as of June 30, 2023, total assets amounted to VND 632,418 billion, a decrease of 5% compared to the beginning of the year. Cash and cash equivalents remained relatively high, reaching VND 41,580 billion, an increase of 7.6% compared to the beginning of the year. Specifically, demand deposits increased sharply by 2.4 times, to VND 18,042 billion; conversely, cash equivalents decreased sharply by 24.7%, to VND 23,440 billion.

As of the end of June 2023, EVN's financial investments totaled VND 42,260 billion, a sharp decrease of 39.7% compared to VND 70,110 billion at the beginning of the year. Of this amount, VND 35,005 billion was held to maturity, a decrease of 44%; according to the financial statement notes, these are EVN's time deposits in banks.

Thus, EVN holds a total of cash and cash equivalents, including deposits, at VND 76,585 billion, a decrease of 25% compared to the beginning of the year.

Cash and cash equivalents, time deposits of EVN. Screenshot from EVN's financial statements.

Meanwhile, equity investments in joint ventures, associated companies, and other entities reached VND 7,225 billion, a slight increase of 1% compared to the beginning of the year.

Short-term receivables increased by 15.6%, reaching VND 39,376 billion. Of this, short-term receivables from customers amounted to VND 16,937 billion, up 23%; prepayments to suppliers totaled VND 9,603 billion, up 22.6%; and other short-term receivables stood at VND 13,232 billion, a slight increase of 2.8%. EVN has set aside VND 398 billion as a provision for doubtful short-term receivables.

Inventory at the end of Q2/2023 stood at VND 25,305 billion, an increase of 18%. The majority of this consisted of raw materials at VND 22,368 billion; goods in transit at VND 1,025 billion; tools and equipment at VND 1,094 billion; and work-in-progress production costs at VND 786 billion.

Long-term work-in-progress assets decreased slightly to VND 39,654 billion, with the entire amount representing work-in-progress construction projects.

Interest expenses have risen sharply.

As of June 30, 2023, EVN's liabilities amounted to VND 437,962 billion, a slight decrease of 0.6% compared to the beginning of the year. Borrowings accounted for nearly 70% of the total liabilities, at VND 306,169 billion, a decrease of 5.5% compared to the beginning of the year. Of this, long-term borrowings were VND 267,071 billion; short-term borrowings were VND 39,097 billion.

High levels of debt have resulted in the Group incurring significant interest expenses, amounting to VND 8,744 billion, a 34% increase compared to the same period last year.

EVN's outstanding debt exceeds 306 trillion VND. (Screenshot from EVN's financial statements)

In addition, short-term accounts payable to suppliers amounted to VND 73,850 billion; short-term accrued expenses were VND 35,670 billion; and other payables totaled VND 9,325 billion.

As of the end of June 2023, EVN's equity stood at VND 194,456 billion, a decrease of 13.7% compared to the beginning of the year. Thus, EVN's liabilities of VND 437,962 billion were 2.2 times higher than its equity.

In terms of corporate structure, EVN Group invests in 17 subsidiaries and 29 affiliated companies. These include power transmission, power generation, thermal power, hydropower, electromechanical, and electrical construction companies, etc.

Specifically, Power Generation Corporation 3 (EVN GECNCO 3 - Stock Code: PGV) and Power Generation Corporation 2 (EVNGENCO 2 - Stock Code: GE2) - two subsidiaries of EVN - have both been operating as joint-stock companies. Accordingly, EVN Group's ownership and voting stake in these two companies have decreased to 99.19% (as of September 27, 2018) and 99.87% (as of July 1, 2021), respectively.

Source: https://laodong.vn/kinh-doanh/khoan-no-vay-hon-306-nghin-ti-dong-cua-evn-1338747.ldo