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BSR earnings get boost as crude import tax turns zero
The latest scrapping of the crude import tax could help local firm Binh Son Refinery and Petrochemical Co Ltd (BSR), securities firms have reported.
The Government on Tuesday decided import tax on crude oil would be slashed to zero per cent from the current 5 per cent on November 1.
BSR will get indirect benefit from the decision as a zero tax rate will allow the firm to diversify the sources of crude used as input for production, Viet Capital Securities Co (VCSC) said.
Zero tax will help BSR reduce its dependence on the US, Southeast Asia and West Africa imports, VCSC said.
This is the opportunity for local oil refiners to access cheap crude imports as domestic crude supply has shown signs of declining recently, boosting demand for crude imports in the future.
BSR will be able to buy crude from the Azeri oil field in Azerbaijan, which is equal to Bach Ho crude in terms of quality and can be mixed at different formulas, according to BSR general director Bui Minh Tien.
The refinery will be able to raise its gross profit margin by 1.3 per cent (in 2020), according to HCM City Securities Corp (HSC).
After the news was released, BSR shares soared 8.6 per cent to VND10,100 (US$0.43) per share on Wednesday. But its shares fell back 2 per cent to end Thursday at VND9,900 per share.
BSR debuted on UPCoM on March 1, 2018 at VND22,400 per share. After 1.5 years, the firm shares have dropped total 55.8 per cent.
In the first half of 2019, BSR recorded nearly VND51 trillion ($2.19 billion) worth of combined revenue and VND900 billion worth of post-tax profit.
The figures accounted for 52 per cent and 30.6 per cent of the full-year plans but declined by 23.3 per cent and 69.5 per cent year on year.
BSR is now refining 85 per cent of domestic crude and 15 per cent of crude imports. From 2020, the company will be able to take control of buying crude from international suppliers.
According to the General Customs Department, Viet Nam imported total 5.48 million tonnes of crude, worth $2.6 billion, in the first eight months. The figures recorded in 2018 were 5.17 million tonnes in volume and $2.74 billion in value.
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