PXT plans to halve its 2018 revenue

Petroleum Tank Pipeline Construction Joint Stock Company (MCCK: PXT) plans for 2018 revenue to reach 231 billion VND and profit of 11.4 billion VND, down more than 50% compared to the previous year.

In the document presented to the 2018 General Meeting of Shareholders, the PXT Board of Directors said that from the end of 2014 until now, crude oil prices have continuously decreased sharply and it is forecast that 2018 will still be volatile, showing signs of slow recovery. Some projects in the oil and gas industry that the Company plans to market are likely to delay their progress until the end of 2018, so production and business activities will continue to face many difficulties. Not only that, PXT still faces the risk of cash flow shortage to pay salaries, social insurance, repay customer debt and invest in improving machinery and equipment capacity to serve production and business.

PXT plans to halve its 2018 revenue.

Facing such a situation, in 2018 the Company set a target of revenue and pre-tax profit of VND 231 billion and VND 11.4 billion, respectively. Compared to 2017, 2017 revenue is expected to grow by more than 3%, but profit is only 50%.

With investment work, in 2018, PXT plans to invest in purchasing to improve construction machinery and equipment capacity. Investment is based on suitability for production and business conditions and financial situation of the unit.

At the same time, PXT will promote information search, strengthen marketing and bidding for projects in the industry, and gradually expand to markets outside the industry. In particular, the company also focuses on items at the Thai Binh 2 Power Plant project, Long Phu 1 Thermal Power Plant, Song Hau 1 Thermal Power Plant, Ca Mau Fertilizer Plant,... and other projects of Investors: PVOil, DMC, PVGas, POC, JOC,...

In addition, the Company will complete the transfer of office floors on the 6th floor, Petroland building, District 7, Ho Chi Minh City.

In the first quarter of 2018 alone, PXT's net revenue and profit after tax reached VND 22 billion and VND 406 million, respectively.

According to the Company's explanation, first quarter revenue decreased mainly due to some common problems of the Thai Binh 2 project that are being resolved by the parties (general contractor supplies are slow, construction site has not been handed over, The appendix adjusted according to the total adjusted investment has not been signed).

According to the Company's explanation, first quarter revenue decreased mainly due to some common problems of the Thai Binh 2 project that are being resolved by the parties (general contractor providing slowly, construction site has not been handed over, appendix adjusted according to the Company's regulations). Total adjusted investment has not been signed yet).

As of the end of the first quarter of 2018, PXT's accumulated losses remained at over 113 billion VND. With this accumulated loss, the Company is expected to not pay dividends in 2017.

Meanwhile, a number of other oil and gas businesses also reported losses in the first quarter of 2018 such as Vietnam Petroleum Electricity Consulting Company (PPE) reported a loss of 2.37 billion VND; Petroleum Civil and Industrial Construction Company (PXI) also reported an additional loss of VND 1.85 billion in the first quarter of 2018 after consecutive losses in 2016 and 2017. Even in the context of many securities companies Reporting high profits in the first quarter of this year, Petroleum Securities Company (PSI) is also in the same situation as other oil and gas companies with a loss of 230 million VND.

With the business situation facing many difficulties, the prices of oil and gas stocks have also continuously decreased deeply in the first months of 2018. From the end of January 2018, PXT stock prices began to slide steadily. As of June 8, 2018, each PXT share was only priced at 2,360 VND/share, a loss of nearly 55% compared to the peak of 5,190 VND/share (January 15, 2018).

In addition, PXT stock is under warning because the undistributed after-tax profit as of December 31, 2017 is -113.8 billion VND.