EVN must ensure profitable business from 2012: PM

17-Jul-2012 Intellasia | Chinh Phu | 8:06 AM

The prime minister on July 10 issued a Decision No 854 approving the business and production plan and five-year development investment plan-2011-2015 for Electricity of Vietnam Group (EVN) whereby the group must ensure profitable business activities since 2012.

In 2011-2015 period, EVN is asked to allocate losses from electricity business activities, which have not been included in the electricity price since 2011, for 2012 and 2013 and allocate forex rate differences in 2012-2015 period.

The group will also step by step raise electricity price and by 2013, the average power price will follow the market mechanism and the group must ensure to gain profit in 2012-2015 period.

By 2015, EVN’s financial targets must meet the requirements of financial institutions whereby the ratio of debts on equity must be less than three times, investment ratio at above 30 percent and the debt payment ratio is higher than 1.5 times.

The group’s chartered capital is expected at 143.404 trillion dong after making asset re-assessment.

Regarding capital mobilisation activities: the prime minister required EVN to focus on raising local and global capital sources to meet the investment demand and domestic and foreign debt repayment in 2011-2015 period, totalled at 501.47 trillion dong.

Of which, domestic investment capital would be 368.759 trillion dong, with 60.5 percent of the total investment for electricity source projects, 17.8 percent for electricity grid transmission lines, 20.7 percent for middle and low voltage electricity distribution grid and 1 percent for other projects. The group will also spend 130.668 trillion dong on payment for principal and interest rate of its loans and contribute 2.042 trillion dong in electricity investment projects.

According to the State Audit of Vietnam (SAV), in 2010, EVN suffered 8.416 trillion dong loss, excluding over 28.5 trillion dong loss from forex rate difference, costs for electricity telecommunication, coal price, and gas price according to the market price. In 2011, the group incurred loss of 17 trillion dong and its accumulated loss till December 31, 2011 was 40.4 trillion dong.

In addition, the group’s liabilities till December 31, 2010 were 239.761 trillion dong and the ratio of liabilities on equity was at 4.22 times.