NGHI Son Refinery and Petrochemical LLC (NSRP) in Vietnam is expected to book a net loss of at least 10 billion yen (S$90.1 million) for 2023 due to heavy costs from rising US interest rates, an executive of Idemitsu Kosan said on Tuesday (Feb 13).
Japanese oil refiner Idemitsu owns a 35.1 per cent stake in NSRP, Vietnam’s largest refinery.
“Nghi Son continues to face the red ink on a net earnings basis due to heavy financial costs caused by high interest-rates on the US dollar,” Yoshitaka Onuma, Idemitsu’s executive officer, told an earnings news conference.
“We can’t disclose the exact loss figure, but net loss is expected to exceed 10 billion yen,” he said.
Still, Nghi Son refinery is running above 100 per cent of stated capacity after completing scheduled maintenance in late October, and the Vietnamese company is expected to book a positive operating income for the year, excluding inventory impact, he said.
Idemitsu is continuing discussions with other sponsors and lenders regarding the financing of Nghi Son and the measures aimed at turning it profitable on a net basis, Onuma said, without specifying the targeted timing for reaching an agreement.
Nghi Son is 35.1 per cent owned by Kuwait Petroleum, 25.1 per cent by Vietnam’s state oil firm PetroVietnam, and 4.7 per cent by Mitsui Chemicals.
Idemitsu on Tuesday reported a 4.2 per cent drop in April to December net profit due to smaller inventory gains and slumping prices of thermal coal.
Japan’s second-biggest refinery posted a profit of 239.1 billion yen in the nine months to Dec 31 compared with 249.6 billion yen a year earlier.
The company stuck to its full-year profit forecast through end-March of 180 billion yen, against the 176 billion yen mean estimate delivered by a poll of seven analysts compiled by LSEG.
Its domestic refineries’ run rate is expected at around 80 per cent in the current year to Mar 31, Onuma said. REUTERS