The State Capital Management Committee was assigned in February to submit a comprehensive plan to remove difficulties for Vietnam Airlines due to the impact of Covid-19.
The above request was stated in the Prime Minister's conclusion announcement on February 14 after a working session with the State Capital Management Committee at Enterprises and 19 State-owned Corporations and Groups.
During the pandemic period (2020-2022), the aviation industry, including the national airline Vietnam Airlines, was severely affected by market impacts.
According to the consolidated financial report for 2022 released at the end of last year, as of December 31, 2022, Vietnam Airlines' short-term debt exceeded short-term assets by VND39,470 billion, equity was negative VND11,056 billion, and overdue payables were VND15,396 billion. In the fiscal year ending on the same day, the airline had a loss after corporate income tax of VND11,223 billion.
In 2023, Vietnam Airlines' business situation improved but its consolidated profit after tax was still negative at about VND5,500 billion. Compared to 2022, this loss has been halved, equivalent to more than VND5,700 billion.
By the end of 2023, the national airline's equity will be negative by nearly VND17,000 billion. The airline's accumulated losses will exceed VND40,000 billion.
According to forecasts, the international market will gradually recover, and Vietnam Airlines' production and business activities are expected to have more positive results in 2024-2025.
The airline has completed the restructuring project for the 2022-2025 period and is reporting to shareholders and competent authorities for approval. Vietnam Airlines said it will restructure its assets and financial investment portfolio to increase income, cash flow and prepare the necessary conditions to issue shares to increase equity after approval.
The Ministry of Finance is amending the Decree on investment and management of state capital in enterprises, in which it proposes solutions for Vietnam Airlines to divest from Pacific Airlines Joint Stock Company. This is also one of the contents in the overall project to remove difficulties for this Corporation.
A Vietnam Airlines Boeing Dreamliner B787-10. Photo: Brandon Chen/Planespotters
In the concluding announcement, the Prime Minister assessed that 2024 still has many difficulties and challenges. Therefore, he requested 19 economic groups and state-owned corporations that are holding large resources of the country to invest in development, expansion, production and business effectively. At the same time, financial indicators, especially the contribution of the state budget to economic growth in 2024 must be higher than in 2023.
To achieve the goal, together with Vietnam Airlines, the Prime Minister requested the State Capital Management Committee to submit to the Government Standing Committee a plan to completely handle the Viet Trung Steel project and the Thai Nguyen Iron and Steel Plant expansion project phase 2 in March; and a project to restructure VEC and Dung Quat Shipyard in the first quarter.
The Government leaders assigned ministries and branches to create favorable conditions and remove legal obstacles related to taxes, land, real estate, and housing so that economic groups and state-owned corporations can invest and develop. The State Capital Management Committee will study and work with ministries and branches to soon find solutions for businesses. Ministries and branches will coordinate in the spirit of national interests, without pushing, avoiding, or harassing.
The State Capital Management Committee is required to arrange personnel correctly and accurately, and absolutely not allow bribery, power-seeking, or corruption in personnel work. "Everything must follow procedures and regulations, and no one must be allowed to negatively interfere in personnel work," the Prime Minister's announcement stated.
Vietnam Electricity, Vietnam Oil and Gas, Vietnam Coal and Mineral Industries Group, and Vietnam Petroleum Group will ensure a major balance of the economy in electricity, petroleum, and gas in 2024.
In addition, the Prime Minister also requested the Ministry of Industry and Trade to innovate the mechanism for managing petroleum trading hubs in the direction of reducing hubs, reducing intermediaries, and adjusting electricity prices appropriately. The Ministry was assigned to submit to the Government a draft of a new Decree on petroleum trading in March; to develop gas, wind, and solar electricity prices in accordance with market mechanisms, and submit to the Government in the second quarter.
Phuong Dung
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