How does EVN Finance work after EVN divests its capital?
VietReader 17-11-2020, 21:33

In the first 9 months of the year, EVN Finance’s pre-tax profit reached 191 billion VND, down 7% compared to the same period last year and exceeded 6% of the yearly plan.

How does EVN Finance work after EVN divests its capital?

Illustration. (Source: EVN Finance)

Sacrifice profits to make provisions

According to the financial statements of the third quarter of 2020, Electricity Finance Joint Stock Company (EVN Finance – Code: EVF) recorded a pre-tax profit of 191 billion VND in the first 9 months, down 7% compared to the same period last year and 6% higher than the annual plan.

Specifically, in 9 months, the company’s net interest income reached VND 522 billion, an increase of 37.3% over the same period in 2019 and accounted for approximately 79% of total operating income.

Net profit from service activities reached 56.8 billion dong, up by more than 56% thanks to a significant reduction in the cost of other services. In addition, irregular business activities also recorded prosperity when bringing in more than 82 billion, up nearly 92%.

In contrast, the forex trading, capital contribution and share purchase were worse than the same period last year; securities investment segment even saw a loss of 1.7 billion dong.

In the first 9 months of the year, the total operating income of EVN Finance reached 663 billion dong, up 41.1%. After deducting 212 billion dong of expenses (up 7.3%), the company’s net profit reached 451 billion dong, up 65.7%.

Notably, the company increased its risk provisioning for the period to 260 billion dong, nearly four times as much as the same period in 2019. This is the main reason that pre-tax profit dropped by 7%, to 191 billion dong.

Business results of EVN Finance. (Source: Compiled from EVN Finance’s financial statements).

As of September 30, EVN Finance’s total assets reached VND 28,124 billion, up 27.1% from the end of last year. In which, deposits and loans to other credit institutions increased sharply from 3,209 billion VND to 9,715 billion VND.

Customer loan balance decreased by 2.5% to 9,624 billion VND. Meanwhile, customer deposits balance increased by more than 44.2% to 6,694 billion, mainly due to the sudden increase in deposits of joint stock company customers from 619 billion VND to over 3,692 billion VND.

After the first 9 months of the year, the company’s bad debt decreased 2.9% from VND 349 billion to VND 339 billion. Thereby, dragging the ratio of NPLs on outstanding loans decreased from 3.53% to 3.52%.

Some financial indicators of EVN Finance. (Source: Compiled from EVN Finance’s financial statements).

Major shareholders continuously divest

As of September 30, EVN Finance’s shareholder structure included Vietnam Electricity (EVN) with 1% capital, An Binh Commercial Joint Stock Bank (ABBank) with 4.97% ownership and other shareholders (94). , 3%).

Shareholder structure of EVN Finance as of September 30. (Source: EVN Finance’s financial statements).

Previously, in September, ABBank sold 9.1 million EVF shares, bringing its ownership rate from 8.4% to 4.97%.

Most recently, Electricity of Vietnam (EVN) also completed its divestment at EVN Finance when successfully auctioned 2.65 million shares of EVF at the end of October.

The number of shares sold by EVN to two individual investors at the price of 17,411 VND / share, about 2.3 times the market price of EVF shares being traded on UPCoM (the reference price of EVF at that time fluctuated around 8,000 / share).

This is also not the first time that EVN has divested its capital at EVN Finance. In October 2017, EVN registered to auction 37.5 million shares of EVN Finance with the starting price of 11,654 dong / share. These shares are divided into 3 lots, organized into 3 auctions, each lot has 12.5 million shares. EVN successfully sold 2 out of 3 lots and earned more than 290 billion dong.

By August 2019, EVN continued to successfully sell 16.25 million shares over 18.75 million EVF shares at auction. Worth mentioning, these shares were also bought by two individual investors at the price of 13,480 dong / share (nearly 70% higher than the market price of EVF shares at that time).

So, after divesting all capital here, EVN collected about 556 billion dong.

According to EVN, the divestment from EVN Finance in order to implement EVN’s overall project on enterprise restructuring and restructuring in the period of 2017 – 2020 has been approved by the Prime Minister.

EVN Finance was established in 2008 with an initial charter capital of 2,500 billion VND, mainly operating capital management for power projects under EVN and its member units, and providing financial products and services.

The company put EVF shares on the stock exchange on August 7, 2018 with the reference price of 12,200 VND / share. Currently, EVF shares are being traded at VND 8,100 / share, an increase of more than 60% compared to the beginning of the year.

Source: – Translated by