REE Energy continues to register to sell 2 million shares of Pha Lai Thermal Power

A subsidiary of Refrigeration Electrical Engineering Corporation continuously sold and continued to register to sell shares of Pha Lai Thermal Power Corporation (code PPC - HoSE floor) to reduce ownership to 20.11% of charter capital.

REE Energy Company Limited (a subsidiary of Refrigeration Electrical Engineering Corporation (code REE - HoSE)) registered to sell 2 million PPC shares to reduce ownership from 66.49 million shares (20.74% of charter capital) to 64.49 million shares (20.11% of charter capital), the transaction is expected to take place from August 27 to September 24.

Since the beginning of the year, REE Energy Company Limited has continuously sold PPC shares to reduce ownership.

Of which, from January 19 to February 26, 665,300 PPC shares were sold; from March 4 to April 1, 1,900 PPC shares were sold; from April 12 to May 10, 2 million PPC shares were sold; from May 21 to June 4, 3 million PPC shares were sold; and from June 12 to July 10, 3,260,000 PPC shares were sold.

Thus, from January 19 to August 14, REE Energy Company Limited reduced its ownership at Pha Lai Thermal Power Plant from 23.5% to 20.74% of charter capital, equivalent to a 2.76% reduction in charter capital at Pha Lai Thermal Power Plant.

The ability to continue as a going concern is dependent upon the competent authority

Previously, Deloitte Vietnam Auditing Co., Ltd. has just audited the 2024 Semi-annual Financial Report of Pha Lai Thermal Power with the issue that needs to be emphasized.

The auditor said that in 2023, Pha Lai Thermal Power Plant will be subject to an administrative fine for environmental violations along with an additional penalty of suspension of operations for 12 months from the date the Ministry of Industry and Trade and Vietnam Electricity Group assign tasks, bid for tasks, designate units or select other contractors to supply electricity to replace the electricity mobilized from Pha Lai Thermal Power Plant.

At the time of the 2024 Semi-Annual Financial Report, Pha Lai Thermal Power is implementing remedial measures and continuing production activities according to the power mobilization plan for 2024. Pha Lai Thermal Power's ability to continue operating depends on the competent authority approving the plan to remedy environmental violations.

“These conditions, together with other matters presented in note 2, indicate the existence of a material uncertainty that may cast significant doubt on Pha Lai Thermal Power's ability to continue as a going concern,” Deloitte Vietnam Auditing emphasized.

It is known that previously in 2023, Pha Lai Thermal Power Plant had committed violations such as discharging dust and exhaust gas containing normal environmental parameters exceeding technical standards on waste at the chimney of line I.

Specifically, total dust exceeded 3.35 times, SO2 exceeded 2.37 times, NOx exceeded 1.11 times, with a flow rate of 167,949 m3/hour, according to the provisions of Point v, Clause 5 and Clause 6, Article 20 of Decree 45/2022/ND-CP dated July 7, 2022 of the Government regulating administrative sanctions for violations in the field of environmental protection.

At the same time, the Company also discharged dust and exhaust gas containing environmental parameters that normally exceed technical standards on waste at the chimney of line II.

Specifically, SO2 exceeded 2.58 times, NOx exceeded 1.34 times, with a flow rate of 331,700 m3/hour, according to the provisions of Point v, Clause 4 and Clause 6, Article 20 of Decree 45/2022/ND-CP dated July 7, 2022 of the Government regulating administrative sanctions for violations in the field of environmental protection.

For the above violations, C05, Ministry of Public Security has issued a decision to administratively fine Pha Lai Thermal Power Joint Stock Company a total fine of more than 3.92 billion VND, and at the same time suspend the Company's operations for a period of 12 months.

Contrasting profit and cash flow in the first half of 2024

In terms of business activities, in the first half of 2024, Pha Lai Thermal Power recorded revenue of VND 4,465.31 billion, up 64.9% over the same period, profit after tax reached VND 251.23 billion, up 24.8% over the same period last year. In which, gross profit margin improved from 4.4% to 5%.

During the period, gross profit increased by 86.7% over the same period, equivalent to an increase of VND 103.64 billion to VND 223.13 billion; financial revenue decreased by 21.1%, equivalent to a decrease of VND 30.55 billion to VND 113.99 billion; business management expenses increased by 37.2%, equivalent to an increase of VND 17.37 billion to VND 64.04 billion and other activities fluctuated insignificantly.

Thus, in the first half of 2024, despite a shortfall in financial revenue and increased management costs, Pha Lai Thermal Power's after-tax profit still increased by 24.8%, due to increased revenue and improved gross profit margin.

In 2024, Pha Lai Thermal Power plans to have revenue of VND 8,755.6 billion, an increase of 39.4% over the same period, and pre-tax profit of VND 427.25 billion, an increase of 11.7% compared to the implementation in 2023.

Thus, ending the first half of 2024 with pre-tax profit reaching VND 271.78 billion, Pha Lai Thermal Power has completed 63.6% of the yearly plan.

In addition, in terms of cash flow, although profits increased, in the first 6 months of 2024, Pha Lai Thermal Power recorded a negative operating cash flow of VND 16.08 billion compared to the same period of positive VND 465.49 billion. In addition, also in the period, investment cash flow was positive VND 312.07 billion and financial cash flow was negative VND 305.79 billion.

It is known that Pha Lai Thermal Power has experienced two consecutive years of negative cash flow when in 2022 it recorded a negative VND 1,077.6 billion and in 2023 it recorded an additional negative VND 303.06 billion.

Notably, in the first 6 months of 2024, Pha Lai Thermal Power increased its inventory by 38.7% compared to the beginning of the year, equivalent to an increase of VND 274.67 billion to VND 983.81 billion; short-term receivables increased by 17.4% compared to the beginning of the year, equivalent to an increase of VND 345.16 billion to VND 2,323.18 billion...

In particular, Pha Lai Thermal Power explained that the increase in short-term receivables was mainly due to receivables from the Electricity Trading Company - Vietnam Electricity Group, which increased by VND 442.3 billion to VND 2,305.2 billion (VND 1,862.9 billion at the beginning of the year).

Thus, the increase in inventories and receivables, including receivables related to the Electricity Trading Company, led to Pha Lai Thermal Power recording negative operating cash flow in the first half of 2024.

Source: https://baodautu.vn/nang-luong-ree-tiep-tuc-dang-ky-ban-ra-2-trieu-co-phieu-nhet-dien-pha-lai-d223047.html