Reporter: After more than half a year of transforming to a joint-stock enterprise model, what are the advantages of EVNGENCO2, Sir?
Mr. Tran Phu Thai - Chairman of the Directors of EVNGENCO2
Mr. Tran Phu Thai: From July 2021, EVNGENCO2 officially transformed into a joint-stock company model. This is a historic milestone in the formation and development of EVNGENCO2, as well as contributing to the overall achievement of Vietnam Electricity (EVN) in the capitalizing task of member corporations.
Capitalizing has helped to innovate the organizational structure and management model of the corporation. Currently, EVNGENCO2 can diversify capital mobilization channels such as accessing abundant private capital on the stock market, contributing to improving capital efficiency. In particular, the healthy financial situation and high profitability in 2021 will create favorable conditions for EVNGENCO2 to attract investment capital in the future
After EVNGENCO2 registered for stock trading on the UPCOM Stock Exchange, potential investors had an additional tool, a measure that reflects relatively accurately and effectively the corporation's performance. The next step, EVNGENCO2 is moving towards listing on official stock exchanges.
Besides great financial potential, human resources are also strengths and advantages of EVNGENCO2. With the bravery and acumen of the leadership, EVNGENCO2 has approached and learned many modern and advanced governance models in the world.
Reporter: What are the challenges that EVNGENCO2 has to face when transforming to a joint-stock enterprise, Sir?
Mr. Tran Phu Thai: In the business model transforming process, legal is the most important issue for EVNGENCO2, especially in the context that the economy is still undergoing many changes and the legal system is in the process of being perfected. After transforming into a joint-stock company model, EVNGENCO2 has made policy adjustments in accordance with regulations on stock and the stock market. These changes have partly affected the business activities of the corporation.
In addition, EVNGENCO2 in particular and the power sector in general still face some challenges, specifically: Hydropower production mainly depends on hydrological conditions; the ability to supply primary fuels input for the Power sector (including coal/gas) from domestic sources is increasingly rare and must be imported from the world market; the investment capital mobilizing for power source projects is increasingly difficult.
In case of high coal or gas prices, the power generation costs of coal or gas power plants will increase, thereby directly reducing the competitiveness of plants in the competitive power generation market as well as indirectly affecting contract generation.
The signing ceremony of strategic cooperation between EVNGENCO2 and Sembcorp Group (Singapore) on 7 November 2021
Reporter: Could you please share the endogenous strength of EVNGENCO2 today so that investors can clearly see and boldly invest in EVNGENCO2?
Mr. Tran Phu Thai: EVNGENCO2 currently manages 4,461MW of installed capacity of various power plant types. Total before-tax profit in 2021 of the parent corporation (EVNGENCO2) reached more than VND 3,754 billion, reaching 108% of the year plan and growing 6 times compared to 2020. Particularly in the last 6 months of 2021 when entering the joint-stock company operating model, EVNGENCO2 made a profit of VND 1,648 billion. As for the debt-to-equity ratio, the parent company EVNGENCO2 is only about 1.1 times as of 31 December 2021, ensuring the loan disbursement conditions from banks. This target when unifying the whole EVNGENCO2 is 1.13 times. Up to now, the investment projects of EVNGENCO2 have had stable profits and very good return on investment; Therefore, EVNGENCO2 is expected to reinvest in expanding production through green and renewable energy projects, contributing to ensuring the power demand for the economy as well as fulfilling the commitments of the Prime Minister with the international community on reducing emissions, combating climate change at the COP26 Conference.
Another endogenous strength of EVNGENCO2 is human resources. The workforce of EVNGENCO2 is strongly in quality, sufficient in quantity, highly qualified and skilled, grasping science and technology, mastering equipment, ensuring safely, continuously and efficiently operating of power plants.
Hai Phong 1 Thermal Power Plant and Hai Phong 2 Thermal Power Plant under Hai Phong Thermal Power Joint-Stock Company (EVNGENCO2)
Reporter: In its development strategy, what are the key areas for breakthroughs in EVNGENCO2?
Mr. Tran Phu Thai: With a wealth of capacity and experience in construction investment, and the mission of constantly supplying and developing power sources to serve the country's socio-economic development, EVNGENCO2 determined the investment and construction of new power sources is the focus area in the future. This operational strategy will create a breakthrough in long-term and sustainable development. Accordingly, EVNGENCO2 is expected to develop power projects in the future, including O Mon V combined cycle gas turbine plant project (1,400MW); O Mon I Thermal Power Plant fuel-conversion project using Block B gas; Pha Lai 3 Thermal Power Plant Project (660MW).
At the same time, EVNGENCO2 also expanded the capacity of its affiliated hydropower plants, including Trung Son Hydropower with an expected expansion capacity of 130MW; Quang Tri Hydropower with an expected expansion capacity of 48MW; Song Ba Ha hydropower plant with an expected expansion capacity of 60MW.
Regarding solar power projects, EVNGENCO2 has Quang Tri solar power project with an expected capacity of 30MWp, Thac Mo solar power cluster - 375MWp (phase 2) and floating solar power projects on the riverbed of Ba Ha 200MWp, Quang Tri 120MWp, An Khe 20MWp and Ka Nak 80MWp.
Notably, on 11 July 2021, together with the launch of the Joint-Stock Company, EVNGENCO2 signed a Memorandum of Understanding on Strategic Cooperation with Sembcorp Group (Singapore). This strategic cooperation aims to help the two parties share experiences in corporate governance, digital transformation and renewable energy projects development in Vietnam in the coming time.
EVNGENCO2 identifies three key areas: Modernizing corporate governance, digital transformation and green transformation. To implement this strategy, EVNGENCO 2 will pay special attention to attracting talent and expanding international cooperation, especially with leading energy corporations. EVNGENCO2 wishes to accompany potential international partners to invest in large-scale projects as well as diversify investment forms.
Reporter: When will EVNGENCO2 officially list shares on a larger stock exchange to attract domestic and foreign investment?
Mr. Tran Phu Thai: The conditions for listing shares of EVNGENCO2 have all been met. Currently, EVNGENCO2 is focusing on the finalization of capitalization costs to hand over capital and assets to a joint-stock company according to new regulations of the Hanoi Stock Exchange. As soon as there is a decision to approve the capital and assets to be transferred to the owner's joint-stock company, EVNGENCO2 will complete the application for additional listing of EVN and employees’ shares on the UPCOM Stock Exchange and proceed with the listing on a larger stock exchange to attract more domestic and foreign investors to invest in EVNGENCO2.
Reporter: Thank you, Sir!