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- BSR released its Q2 2024 results with revenue of VND24.4tn (-27% YoY) and reported NPAT-MI of VND768bn (-43% YoY) vs previous guidance of a loss. The YoY decrease is mainly due to (1) 29% YoY lower sales volume because of the planned fifth turnaround (50 days- from 15 March to 1 May), and (2) a 1.5 ppt decrease YoY in GPM. These declines in core earnings were partly offset by VND390bn of one-off financial income from the change in consolidating BSR-BF (biofuel company) to using the cost method for this investment. BSR successfully removed BSR BF’s overdue debt (VND1,127bn) in its consolidated financial statement, which they believe makes it qualified to list on HOSE after submitting the documents in August. In addition, BSR also expects to get approval from CMSC to increase its share capital by ~61% via stock dividend.
- In H1 2024, revenue was VND55.1tn (-19% YoY) and reported NPAT-MI was VND1.9tn (-35% YoY). The declines mirror Q2 trends, with a (1) 19% YoY lower sales volume (due to the fifth turnaround) and (2) 1.6 ppt decrease YoY in GPM also due to YoY lower average crack spreads.
- H1 2024 results are in line with our expectations, which are equivalent to 43% and 31% of our respective revenue and reported NPAT-MI forecasts. As a result, we foresee insignificant risks to our earnings forecast, pending a fuller review. For H2 2024, we expect significantly higher earnings vs H1 2024, driven by 21% higher sales volume as BSR operates at full utilization and an efficiency rate of 114%, and improve gross profit margin following the crack spreads bottoming out in June 2024.
- The crack spreads bottomed out in June 2024. In July 2024, the average Singapore gasoline and diesel crack spreads were USD10.2/bbl (+38% vs June 2024) and USD15.9/bbl (+23% vs June).
- 7M 2024 crack spreads remained significantly above the pre-pandemic levels. The average Singapore gasoline and diesel crack spreads in 7M 2024 were USD12.5/bbl (-3% YoY) and USD16.0/bbl (-14% YoY), respectively, which are 62% and 28% higher compared to pre-pandemic levels (2017-2019 averages), respectively.
- We currently have a BUY rating for BSR.
BSR’s H1 2024 results
VND bn | Q2 2023 | Q2 2024 | YoY | H1 2023 | H1 2024 | YoY | % of Vietcap’s 2024F |
Brent oil price (USD/bbl) * | 78 | 85 | 9% | 80 | 83 | 4% | 100% |
Sales volume ('000 tonnes) | 1,842 | 1,313 | -29% | 3,499 | 2,830 | -19% | 45% |
Revenue | 33,669 | 24,429 | -27% | 67,735 | 55,118 | -19% | 43% |
COGS | -32,491 | -23,930 | -26% | -64,486 | -53,364 | -17% | 44% |
Gross profit | 1,178 | 498 | -58% | 3,249 | 1,754 | -46% | 24% |
Sales and marketing expenses | -176 | -125 | -29% | -501 | -273 | -46% | 28% |
General and admin expenses | -158 | -145 | -8% | -247 | -256 | 4% | 46% |
Operating profit | 843 | 228 | -73% | 2,501 | 1,225 | -51% | 21% |
Financial income | 471 | 746 | 58% | 1,281 | 1,266 | -1% | 75% |
Financial expense | 153 | -138 | -190% | -486 | -394 | -19% | 44% |
Profit before tax | 1,475 | 840 | -43% | 3,318 | 2,112 | -36% | 31% |
NPAT-MI reported | 1,342 | 768 | -43% | 2,971 | 1,925 | -35% | 31% |
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| Δ ppts |
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GPM | 3.5% | 2.0% | -1.5 | 4.8% | 3.2% | -1.6 |
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SG&A %sales | 1.0% | 1.1% | +0.1 | 1.1% | 1.0% | -0.1 |
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EBIT Margin | 2.5% | 0.9% | -1.6 | 3.7% | 2.2% | -1.5 |
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Reported NPAT-MI Margin | 4.0% | 3.1% | -0.8 | 4.4% | 3.5% | -0.9 |
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Source: BSR, Vietcap (*average prices)
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