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Tuesday, November 24, 2020

State firms to continue suffering heavy losses

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HCMC – If the coronavirus disease continues to ravage for the world for a prolonged period and oil prices do not recover, the revenues of 19 State-owned groups and corporations will decline by some VND280 trillion, or some US$12 billion, against initial estimates, according to the Commission for the Management of State Capital at Enterprises (CMSC).

Nguoi Lao Dong newspaper cited the commission’s report, noting that Vietnam Airlines Corporation (VNA) has suffered the greatest damage as all of its international flights have had to be cancelled and its domestic flights are running on a minimal schedule.

In the first quarter, VNA lost VND2.383 trillion. If the pandemic continues throughout the year, the firm will lose roughly VND19.651 trillion. VNA exhausted its reserve early this year and might lack some VND15 trillion this year.

Vietnam National Petroleum Group (Petrolimex) is also sustaining losses, at some VND572 billion in the first quarter and an estimated VND1.143 trillion for the year. The report pointed out that the sharp drop in oil prices has struck a blow to Petrolimex.

A lack of supplies and limited exports are among the difficulties being faced by Vietnam National Chemical Group. The group recorded a loss of some VND187 billion in the first quarter. Its revenues are forecast to drop by VND10 trillion, resulting in an estimated loss of VND4.379 trillion.

Vietnam Railways Corporation might see a revenue decline of VND700 billion to VND1 trillion this year and may lose VND694-935 billion. Vietnam National Coal-Mineral Industries Corporation expects to see a VND1 trillion reduction in mineral sales, whereas Vietnam Expressway Corporation might lose VND140 billion.

In its report, the CMSC proposed the consideration of loan and tax remedies for businesses.

The commission has asked the central State Bank to provide instructions so that groups and corporations can access the VND250-trillion credit package. According to the commission, the air carrier VNA alone needs aid amounting to VND12 trillion from this month to maintain its operations and ensure liquidity.

Economic expert Nguyen Tri Hieu told the newspaper that VNA and many other businesses are having trouble with cash flow. Therefore, besides providing support packages for banks, the Government should inject money into enterprises to help them increase their liquidity and maintain their business activities. Hieu also proposed increasing capital for the credit guarantee fund, enabling enterprises to access bank loans.

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