Petrolimex negative cash flow

In the separate financial statements of the parent company – Vietnam National Petroleum Group (Petrolimex, code PLX) in 2021, Petrolimex recorded a negative net cash flow in business activities of more than VND 3,050 billion, while the same period was positive at VND 2,703 billion. copper.

On the consolidated report, the net cash flow from business activities in 2021 of the petroleum giant was also negative by more than VND 656 billion. The main reason is due to the increase in both inventory value and receivables.

According to experts, cash flow management is an important criterion for running a business. In case the cash inflow is smaller than the cash out, it shows that the business is in trouble, may fall into a debt burden. Enterprises will have to cover expenses with investment cash flow or financial operating cash flow, such as borrowing, raising more capital from shareholders, liquidating assets.

According to the consolidated report, the outstanding assets in the short-term asset structure of Petrolimex are short-term receivables amounting to more than VND7,599 billion, more than cash and cash equivalents. In this item, there are more than 1,069 billion dong receivable from Xuyen Viet Oil Transport and Tourism Co., Ltd, more than 908 billion dong receivable from Vietjet and more than 5,344 billion dong receivable from other customers.

With the parent company alone, as of December 31, 2021, there are more than 268 billion VND of overdue debt from 6 to 12 months, the recovery value is only 209.8 billion VND and more than 311 billion VND of overdue debt under 24 months. can recover only 184 billion VND at Petrolimex Laos One Member Company Limited.

Inventories at the time of reporting of Petrolimex were more than 13,163 billion dong, up 40%, mainly petroleum, more than 9,475 billion dong. Provision for devaluation of inventories is more than 223 billion dong, 10.1 times higher than the same period in 2020.

Still according to the report, Petrolimex currently carries a debt of more than 36,531 billion VND, equivalent to the beginning of the year. In which, short-term debt is more than VND 35,207 billion, short-term debt is more than VND 14,225 billion, long-term debt is more than VND 1,144 billion. Large debt causes businesses to spend more than 602 billion VND in interest in 2021.

Most of Petrolimex’s short-term loans are bank loans in Vietnamese currency, with terms ranging from 3 to 12 months. These loans are secured in the form of unsecured loans to supplement working capital and open letters of credit (L/C) to import petroleum. Interest rates are determined by each bank and each loan.

Meanwhile, long-term loans mainly include bank loans with terms from 12 to 120 months from subsidiaries. Long-term borrowing purposes to finance investment projects, build petroleum depots, buy oil tankers and other projects.

In terms of business results, according to the consolidated report, in 2021 Petrolimex achieved net revenue of more than 169,000 billion VND, an increase of approximately 37% over the same period. On average, every day Petrolimex collects more than VND 463 billion from sales and services. Profit after tax for the whole year reached VND 3,123 billion, 2.5 times higher than the same period in 2020. The parent company’s profit after tax was VND 1,637 billion, a sharp increase over the same period.

On the market, Petrolimex’s PLX shares are trading at 48,300 dong/share, down 10.39% compared to the beginning of the year (from January 1 to April 27), causing each share to “fly” by 5,600 dong. With more than 1.2 million shares outstanding, the corporate market capitalization was washed away by more than VND 6,800 billion.

The parent company – Petrolimex Group currently invests and contributes capital in subsidiaries, joint ventures and other entities with the amount of tens of trillions of dong.

In September 2019, the Central Inspection Committee held its 39th session, chaired by Mr. Tran Cam Tu, Secretary of the Party Central Committee, Chairman of the Central Inspection Committee, to conduct inspection when there are signs of violations against regulations of law. Standing Committee of the Party Committee of Vietnam National Petroleum Group (Petrolimex).

The Central Audit Committee determined that the Standing Board of the Party Committee of Petrolimex was irresponsible, loose leadership and direction, lacked inspection and supervision, so that the corporation had many violations of the Party’s regulations and the State’s laws in the public sector. cadres; in the management, use, preservation and development of capital and assets; petroleum business activities; equitization, restructuring, divestment of state capital and implementation of a number of construction investment projects, causing serious consequences and great loss of money and property of the State.