Outward investment of SOEs sees positive changes

The outward investment mainly focuses on sectors such as oil and gas; telecommunication; rubber latex planting and processing. Photo: Internet.

88 outward investment projects see profits

A Government's report on investment, management and use of state capital in enterprises nationwide in 2021 shows that, as of December 31, 2021, there are 30 SOEs and enterprises with state capital investing in 137 projects abroad, in the form of direct investment and investment through tier-1 and tier-2 subsidiaries, and 26 countries and territories receiving the investment of Vietnam’s SOEs and enterprises with state capital.

The outward investment mainly focuses on sectors such as oil and gas; telecommunication; rubber latex planting and processing and others (mineral mining; agriculture; construction and installation, commerce, air transportation). Of these, oil and gas, telecommunications and rubber latex planting and processing have been largest invested, accounting for 96% of outward investment.

Regarding capital recovery, in 2021, Vietnam recovered US$509.75 million from outward investment projects, of which the repatriated profit was US$ 278.56 million, mainly from projects of groups and corporations such as: PVN (US$288.34 million), Viettel (US$147.12 million), Vietnam Airlines (US$35 million), Vietnam Rubber Group (VRG) (US$ 13.89 million) Electricity Group (US$8.3 million) and other six enterprises (US$1.56 million). As of December 31, 2021, 62 outward investment projects of 14 enterprises recovered US$ 3,641.43 million (including repatriated profits of US$1,744.5 million, equal to 55% of the total outward investment).

In 2021, Vietnam had 88 outward investment projects, brining US$7,786.56 million in revenue, up 40% year-on-year; 62 projects recorded an after-tax profit of US$810.2 million, rising 90% compared to 2020.

87% of losses come from investment projects in the telecommunications sector

According to the report, besides profit-making projects, there are 30 loss-making projects in 2021 with a loss of US$ 335.53 million, up 42% compared to the loss of 2020. The losses caused by investment projects in the telecommunications sector (eight telecommunications projects with a loss of US$293.32 million, accounting for 87%) was mainly due to exchange rate losses of projects in the Myanmar market of Viettel (US$246.98 million) and strong exchange rate fluctuations and business loss in the Tanzania market (US$43.93 million). Thus, by the end of 2021, there are still 44 projects with a loss of US$1,335.10 million, down two loss-making projects but up US$ 164.04 million compared to 2020.

According to the Government's assessment, in 2021, many investment projects had increased revenue and profit compared to 2020 (40% and 90% respectively). The profit sharing in 2021 also increased 2.4 times compared to 2020. The Vietnam’s recovered capital from outward investment projects rose US$ 261 million, doubling the results in 2020.

Regarding the efficiency of projects, economic, political, social fluctuations and security and safety in the investment countries and territories, a number of high-risk investment sectors (petroleum exploration, mining, etc.), the changes in mechanisms, policies and laws in the investment countries, the lack of transparency and consistency in laws in some countries, and the ability to forecast and plan investment projects is still limited, have affected the operation and efficiency of the project. Outward investment projects have incurred losses and rising accumulated losses.

To improve the efficiency of outward investment, the Government proposed to the National Assembly to promote State diplomatic relations between Vietnam and countries receiving investment capital from SOEs and enterprises with state capital (such as in Laos, Cambodia, and Myanmar) to suggest them to have consistent and transparent preferential and investment policies, creating a stable and safe investment environment for Vietnamese enterprises. Furthermore, the Government will continue to focus on restructuring outward investment activities of enterprises in the implementation of the master project of SOEs restructuring for the 2021 – 2025 period; strengthen the management and supervision of outward investment activities, profit repatriation, and comply with the reporting regime, assess the efficiency of outward investment.