REE Says To Boost Power Sector Investment

The power sector is on REE’s target, so the HCMC-based firm will steadily step up investment in hydropower and thermo-power companies, said Nguyen Thi Mai Thanh, chairwoman and CEO of Refrigeration Electrical Engineering Corporation (REE).

Prior to March, REE already became a major shareholder in many power companies such as Thac Ba Hydropower with a 23.97% stake, Thac Mo Hydropower (35%), and Ninh Binh Thermal Power (28.4%). In August, REE said it had bought into several coal firms like Nui Beo Coal (5.14%) and Deo Nai Coal (5%).

The company has recently announced that it is owning over 5% of Pha Lai Thermal Power JSC (PPC), a large-scale thermal electricity company with total chartered capital of more than VND3 trillion.

In the first eight months of the year, REE divested its holdings at big banks such as ACB and Sacombank, and adjusted its investment portfolio to focus on companies active in the fields of power, water and infrastructure.

According to Thanh, REE also eyes infrastructure companies. Its investments in these businesses do not guarantee immediate profit but in the long run it will facilitate REE’s main business field of supplying power for construction works.

REE holds a 42% stake in Thu Duc Water BOO Corp., said Thanh. In the coming time, REE will boost investment in the water treatment sector.

Thanh noted a company’s business plan should look to a vision of five or ten years. Investments in real estate and finance sectors are risky, she said, so the company should redirect its investments towards secure fields of business.

Moreover, Thanh said investments in other companies brought in VND42.9 billion dividends for REE in the second quarter, nearly one third of its profit.

In the property sector, REE still centers on office buildings for lease, which supply an additional 15,000-20,000 square meters of floor space each year. Thanh said the completed projects are now 95% full.

The current difficulty is REE does not receive much support from banks in investment loans, making the company more cautious with property projects, said Thanh.

She predicted REE could obtain the profit target of VND600 billion this year, chiefly from its main business operations and financial investments. REE has assumed a project to supply power to Noi Bai Airport terminal at a total cost of VND900 billion.

In the first six months of the year, REE gained a total profit of VND414.4 billion, mainly from office leasing, power supply for construction works, and dividends from the REE-invested companies.

 

 

 

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