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Enterprises earn trillions of VND in interest income

18:22 | 13/09/2019

VCN- Many listed companies own cash and bank deposits oftrillions of VND. As a result, besides main business activities, deposit interest also contributes a significant proportion to the total revenue of these businesses.

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Interest income contributed a significant proportion in the profit structure of large enterprises. Photo: Internet

Tens of trillions in cash

According to the semi-annual financial report of enterprises, by the end of the second quarter of 2019, the amount of cash and bank deposits of PetroVietNam Gas (PV Gas) was 31,394 billion VND, an increase of 3,000 billion VND compared to the beginning of 2019. Vingroup also owns 25,000 billion VND of cash and bank deposits, increasing by 9,000 billion VND compared to the beginning of the year. For Vinhomes, this figure also increased sharply from over 4,500 billion VNDat the beginning of the year to 14,600 billion VND.

Many other businesses also have cash and bank deposits of up to tens of trillions of VND, such as Vietnam Airport Corporation (ACV) with over 29,000 billion VND, Vietnam Engine and Agricultural Machinery Corporation (VEAM) with 12,000 billion VND, Saigon Beer and Alcohol Corporation (Sabeco) with over 13,000 billion VND, Vietnam Dairy Corporation (Vinamilk) with over 10,000 billion VND, and Vietnam National Petroleum Group (Petrolimex) with over 15,000 billion VND.

These large amounts brought significant income for these businesses. Typically, VIC's deposit interest reached 1,367 billion VND in the first half of this year, an increase of 63% compared to the same period last year; Vinhomes also earned more than 1,100 billion VND from interest on deposits, nearly double the same period last year. This interest income accounted for 20% of VIC's pretax profit and more than 8% of VHM's profits before tax.

At VEAM, deposit interest also reached 367 billion VND in the first 6 months, increasing by 154% compared to the same period last year. This revenue also contributed 11% to the pre-tax profit of this enterprise. VEAM management expects that the interest income from deposits can reach 700-800 billion VND this year, much higher than the target of 600 billion VND. Many other businesses also saw high revenues from deposit interest after only half a year, such as ACV with 786 billion VND, PV Gas with 660 billion VND, Sabeco with 358 billion VND, Petrolimex with more than 300 billion VND and Vinamilk with 335 billion VND.

More cash but still borrowing

Although they have more cash, many businesses are also suffering from huge loans of tens of billions of VND.

For example, Petrolimex is borrowing more than 15,000 billion VND. Thisincludes nearly 13,000 billion VND of short-term loans for working capital and opened letters of creditfor imported petroleum.The remaining 1,400 billion VND is the long-term loans of the Group's subsidiaries to finance investment projects, build petroleum depots, buy tankers and other group projects. Accordingly, in the first half of the year, Petrolimex had to pay 424 billion VND in interest expenses, increasing by 10 billion VND compared to the same period last year.

Meanwhile, VIC borrowed more than 92,000 billion VND. In particular, there were nearly 7,200 billion VND of short-term loans of Credit Suisse AG, Vietcombank and partners, and other financial institutions; 38,000 billion VND of long-term loan from domestic credit institutions, the rest is made up of bonds.

In the first 6 months of 2019, VIC's interest expense was over 2,800 billion VND, increasing by nearly 1,000 billion VND compared to the same period last year. VHM's loans were also up to 32,000 billion VND and finance expense was over 1,000 billion VND.

The outstanding debt of ACV is also 209 billion VND, including credit loans with ODA capital of Japan Bank for International Cooperation to implement construction projects at Tan Son Nhat airport and NoiBai airport. Similarly, PV Gas is also borrowing more than 3,400 billion VND, and Vinamilk is borrowing 3,500 billion VND.

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According to analysts, for large-scale enterprises operating in industries that need large investments, the borrowing of enterprises is understandable. At that time, deposits at banks were used as collateral for loans of businesses. This amount of cash is a provision for businesses to overcome difficulties and can help them seize opportunitiesor M&A in the future, and help businesses reinvestin technology to improve business efficiency. However, despite the availability of cash, according to experts, the investment capital also needs to be calculated carefully. In the past, there were cases of incorrect investment that led to losses and fell into a state of turmoil, reducing the value of enterprises.

By KhaiKy/ KieuOanh