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EVN runs debt exceeding $11.4 billion
The debt of the Electricity of Vietnam Group (EVN) has exceeded VND240 trillion ($11.4 billion) as of 2010, according to a recent report from the State Audit of Vietnam.
Recent auditing results showed that the Vietnamese state-run electricity monopoly has invested over VND2.1 trillion in sensitive and non-core sectors such as property, insurance and banking, accounting for 3.27 percent of the group’s equity.
As a result, EVN’s investment has become inefficient since the aforementioned sectors have faced certain difficulties in recent times.
Long-term financial investment of EVN as of December 2010 is up to VND50 trillion, 90 percent of which was poured into its affiliates, while the remaining was invested in its joint ventures and associated companies.
However, its profit totaled at around VND540 billion only, representing the return on investment (ROI) ratio of 1 percent.
Also, EVN saw huge losses after pouring money in telecommunications with an investment of VND2.442 trillion into its subsidiary of EVN Telecom.
But EVN Telecom’s revenues from sales and service provision saw a steady decline from a profit of VND93.8 billion in 2008 to VND8.3 billion in 2009 and a loss of VND1.026 trillion in 2010.
The decline even did not take into account the fact that EVN Telecom transferred handsets unsold in 2006-2008 to its parent corporations at a cost of VND1.026 trillion to alleviate EVN Telecom’s difficulties at the time.
According to the State Audit of Vietnam, the total debt of EVN by late 2010 is VND200 trillion, making up 80 percent of EVN’s total capital.
The sum of money EVN owed to two other state-owned groups, PetroVietnam and Vinacomin, till June 30, 2011 is estimated at more than VND8.860 trillion and VND1.2 trillion respectively.
With the 2010 loss of VND8.4 trillion, the return on equity (ROE) ratio last year is minus 14.8 percent and the return on asset (ROA) ratio is minus 2.78 percent.
In electricity production and trading alone, EVN suffered a loss of VND10.5 trillion due to severe droughts forcing it to buy electricity produced by thermal power plants fueled by oil outside its own network at prices 3-4 times higher than average levels.
In late October 2011, the Prime Minister ordered ministries of finance, industry and trade to examine the non-core investments of EVN Telecom and EVN.
High salary payment
The average income of EVN’s employees in 2010 is VND13.7 million per month. Specifically, monthly incomes of officials in the group are 2 times higher than that, according to the State Audit.
The monthly incomes of employees in the electricity transmission and distribution segments are VND10.8 million and around VND7.9 million respectively.
The salary distribution among EVN affiliates does not ensure equal benefits for all sides, said the State Audit.
Earlier, EVN General Director Pham Le Thanh told a press meeting that the average income in the sector was only VND7.3 million in 2009.
He said still felt “sorrowful” as such an income was not enough for urban areas.
According to data of Ministry of Labor, Invalid and Social Affairs, the average monthly salary of employees in 2009 in state-owned enterprises was VND3.35 million and for special corporations and parent companies of state economic groups, the average rate was VND5.9 million.
The payments for those working in foreign-invested firms and private businesses were VND2.65 million and VND 2.05 million respectively.
As of yesterday, electricity prices have been hiked by 5 percent. Earlier, EVN had lobbied for an 11 percent rise.
With this power price increase, EVN will yearly earn an additional VND6 trillion ($285.5 million), which is “a very modest figure”, newswire VnExpress quoted Dinh Quang Tri, EVN’s deputy general director, as saying.
vietnamnet
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