PVS - Reported NPAT-MI up 10% YoY, in line with forecast - Earnings Flash

• PVS reported Q1 2025 revenue of VND6.0tn (+62% YoY) and reported NPAT-MI of VND332bn (+10% YoY). The growth in reported NPAT-MI, mainly driven by (1) a 2.2x increase in net financial income to VND340bn (including VND125bn in FX gains and VND130bn in non-recurring asset revaluation gains), and (2) stable 8% YoY growth in FSO/FPSO JV income, outweighs (3) the decline in operating profit caused by much higher G&A expenses.
• Revenue growth was led by a 2.2x YoY surge in M&C revenue, which we attribute to the acceleration of Block B-related EPCI contracts (#1–3) and the 33 jackets/foundations for Greater Changhua. However, blended GPM dropped to 4.3%, primarily due to the M&C segment's GPM falling to 1.2%. This is broadly in line with our full-year expectation of 1.5%, and we attribute it to (1) PVS continuing to expense its capex into COGS for expanding offshore wind M&C, and (2) an increase in construction warranty provisions for offshore wind projects.
• G&A expenses increased 82% YoY. This was mainly due to (1) labor and outsourcing costs increasing 33% and 41% YoY, respectively, and (2) an additional non-recurring provision of VND110bn. We note that PVS wrote back VND78bn of land lease provisions (related to its 51%-owned subsidiary Sao Mai – Ben Dinh). This land lease provision reversal signals positive progress in discussions with tax authorities.
• Cash and short-term investments rose to VND16.5tn (+76% YoY, +8% QoQ), pushing net cash/equity to 99%. As of Q1 2025, PVS recorded (1) VND6.2tn in accrued expenses (3.4x YoY; 33% QoQ) and VND1.7tn in long-term customer advances (2.2x YoY; -5% QoQ), signaling a robust backlog.
• We see insignificant changes to our 2025 earnings forecast, with Q1 revenue and reported NPAT-MI equivalent to 17% and 36% of our 2025 estimates, respectively. Recurring NPAT-MI reached 28% of our 2025F forecast, supporting our view that PVS remains on track for full-year delivery amid a strong order backlog. 
• We reiterate our BUY rating for PVS with a target price of VND44,900/share. Please see our latest Update Report for more details.

Figure 1: PVS’s Q1 2025 results

Source: PVS, Vietcap. Note: (*) Recurring NPAT-MI excludes the impact of provision expenses for the technical issue at FSO MV12 and provision expenses for risk of contract termination of FPSO Lam Son. We treat expenses/profits from M&C warranty provisions/reversals (booked in other profit) as a recurring item, as this is a recurring activity for any contractor. We also excludes the impact of forex losses.

Figure 2: PVS’ revenue, gross profit, and gross margin breakdown in Q1 2025

Source: PVS, Vietcap

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