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- BWE announced its Q2 2024 results with parent sales volume of 52 million cubic meters (+10.2% YoY); revenue of VND1,034bn (USD40.8mn; +18% YoY) and reported NPAT-MI of VND134bn (USD5.3mn; -36% YoY, mainly due to forex loss).
- For H1 2024, BWE’s parent sales volume was 99 million cubic meters (+9.5% YoY; 50% of our 2024F), while revenue was VND1,826bn (USD72mn; +17% YoY) and reported NPAT-MI was VND313bn (USD12.3mn; -10.6% YoY). These results complete 46% and 41% of our respective full-year forecasts.
- Excluding the impact of forex loss, BWE’s core NPAT for the first half of 2024 was VND393bn (USD15.5mn; +10.4% YoY; 46% of our 2024F). This is roughly in line with our forecast as (1) the current revenue and NPAT has not included the VND214bn unrecorded portion from the wastewater and waste treatment segments and (2) we expect FY2024’s interest expense YoY growth to be lower in 2H2024 due to the refinancing loan activity for the some high-interest rate loans.
- Strong H1 2024 revenue growth was mainly contributed to by ~10% sales volume growth in Binh Duong Province and the contribution of Biwase Long An. However, reported NPAT-MI suffered negative growth due to (1) a higher COGS growth of 21% YoY, (2) 65% YoY higher financial expenses, which we attribute to 6.6% higher outstanding loans (VND5,327bn; USD210mn) and a ~15x YoY higher FX loss from USD-denominated loans following a ~4.3% appreciation of the USD against the VND, and (3) an 80% decrease in shared profit from associates, which was dampened by a loss from Gia Tan Water – BWE’s associate.
- Overall, we see insignificant change to our recent forecasts. See more in our latest Water Sector Update, dated June 27, 2024.
- We currently have an OUTPERFORM rating for BWE with a target price of VND48,500/share.
BWE’s H1 2024 results
VND bn (unless stated) | Q2 2023 | Q2 2024 | YoY | H1 2023 | H1 2024 | YoY | % of Vietcap’s 2024F |
Water sales volume (million cbm) | 47 | 52 | 10.2% | 91 | 99 | 9.5% | 50% |
Revenue | 877 | 1,034 | 18.0% | 1,558 | 1,826 | 17.2% | 46% |
Water supply & distribution | 582 | 701 | 20.4% | 1,102 | 1,328 | 20.5% | 52% |
Waste treatment | 166 | 146 | -12.1% | 235 | 236 | 0.8% | 32% |
Wastewater treatment | 35 | -3 | -108.0% | 58 | 0 | -99.2% | 0% |
Trading & others | 94 | 190 | 102.1% | 163 | 261 | 59.8% | 52% |
COGS | -494 | -623 | 26.1% | -842 | -1,023 | 21.4% | 46% |
Gross profit | 383 | 411 | 7.4% | 715 | 803 | 12.3% | 47% |
Water supply | 319 | 404 | 26.7% | 624 | 763 | 22.1% | 53% |
Waste treatment | 23 | 1 | -93.9% | 33 | 12 | -65.0% | 8% |
Wastewater treatment | 7 | 1 | -83.4% | 11 | -1 | -108.9% | -2% |
Trading & others | 34 | 5 | -86.4% | 47 | 30 | -35.4% | 33% |
SG&A expenses | -137 | -157 | 14.5% | -263 | -297 | 12.9% | 49% |
Operating profit | 246 | 254 | 3.4% | 452 | 506 | 12.0% | 45% |
Financial income | 17 | 40 | 135.1% | 63 | 63 | 0.3% | 52% |
Financial expenses | -61 | -137 | 123.7% | -135 | -222 | 65.0% | 52% |
In which: Interest expenses | -57 | -65 | 15.5% | -130 | -147 | 13.2% | 43% |
In which: FX loss | -5 | -72 | 1413.2% | -5 | -75 | 1476.5% | 93% |
Shared profit from associates | 28 | -5 | N.M. | 7 | 1 | -80.3% | 4% |
Other income/loss | 4 | 3 | -18.9% | 4 | 5 | 16.6% | N.M |
Profit before tax | 234 | 155 | -33.5% | 392 | 354 | -9.7% | 42% |
Income tax expense | -23 | -18 | -24.6% | -41 | -36 | -12.4% | 46% |
NPAT before MI | 210 | 138 | -34.4% | 351 | 318 | -9.4% | 41% |
Minority interest | -1 | -4 | N.M. | -1 | -5 | N.M. | 54% |
Reported NPAT-MI | 209 | 134 | -36.2% | 350 | 313 | -10.6% | 41% |
Core NPAT breakdown, excluding FX loss and one-off | 215 | 210 | -2.3% | 355 | 393 | 10.4% | 46% |
Water supply | 152 | 142 | -6.7% | 286 | 311 | 8.8% | 54% |
Waste treatment | 6 | 1 | -76.7% | 7 | 3 | -58.3% | 7% |
Wastewater treatment | 1 | -5 | N.M. | 2 | -10 | N.M. | N.M. |
Trading & Others | 56 | 71 | 28.1% | 60 | 89 | 46.8% | 42% |
Source: BWE, Vietcap
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