Back to Previous Page
Company Quarterly Earnings Update – BWE VN – 9M/2024
Summary of the 9M/2024 results and outlook of Binh Duong Water Environment JSC (BWE VN)
- Revenue grew 15.4% y/y to VND2,768 bn, primarily driven by the water supply segment, which increased 14.5% y/y (70% of total revenue). Specifically, Binh Duong’s sales rose 7.2% y/y, benefiting from new residential customers and improved manufacturing activities. Additionally, the consolidation of Biwase-Long An since Q2/2023 further supported growth. In contrast, the waste and wastewater treatment segments (13.8% of total revenue), seeing a decline of 15.8% y/y, mainly due to delays in legal procedures for revenue recognition. Revenue from other segments surged by 79.6% y/y, largely due to the expansion of water pipeline construction.
- Net profit fell 7% y/y to VND497 bn. The main reasons for lower profit margin are: firstly, lower profit margin of the waste treatment segment given higher waste treatment costs, secondly higher administration expenses because of Biwase-Long An consolidation, and lastly the unrealized FX losses from BWE’s USD-denominated loans as USD strengthened.
- Leverage remained moderate: with D/E and D/A ratios at 1.03x and 0.44x, respectively.
- For Q4/2024, we expect revenue to be driven by higher water consumption and the recognition of pending revenue from the waste and wastewater treatment segments. However, profit margins in the waste treatment segment are likely to remain under pressure due to rising costs and pending price adjustments. Moreover, unrealized FX losses are expected to persist due to the rise of USD/VND.
- In 2025, a strong earnings growth is anticipated, driven by higher water and waste treatment prices and reduced FX losses. We project revenue to be driven by higher water consumption along with anticipated approvals for a 3.0% increase in Binh Duong water prices and a 20% rise in waste treatment prices, both expected to take effect from the beginning of H2/2025. The added capacity from Biwase-Long An is expected to contribute from 2026 due to delayed legal procedures. With a stable USD/VND exchange rate, FX losses will be minimized.
Company ratings and target prices are accessible for clients only.
If you are interested in getting full access to our paid Primary Research Materials feel free to get in touch with us at your convenience.
Our team is actively covering 50 companies in the listed Vietnamese equity space for our clients.
Featured image credit: biwase.com.vn
