Vietnam invests $12 billion abroad, telcos earn biggest profits
The total outward investment capital registered so far has reached $12.2 billion. The national oil and gas group PetroVietnam, the mililtary telco Viettel, and the Vietnam Rubber Group (VRG) are the biggest outward investors.
The government’s report on the implementation of the National Assembly’s resolutions in the finance sector gives details about the performance of outward investment projects.
Twenty three state owned enterprises (SOEs) and state invested enterprises did not register new outward investments in 2019.
The total outward investment capital implemented in the year was $273 million, mostly by the three biggest investors – PetroVietnam, Viettel and VRG.
As of December 31, 2019, the total implemented outward investment capital had reached $6.1 billion, accounting for 50.47 percent of total registered outward investment capital. This means that $6 billion more worth of capital will still have to be implemented.
PetroVietnam is the biggest investor with accumulative investment capital of $3.12 billion, accounting for 51 percent. The second position belongs to Viettel and third position to VRG.
In 2019, the outward investment projects, which updated their business performance results, transferred $434 million home (PetroVietnam $300 million and Viettel $114 million). Of this, $234 million was from profits, dividends and loan interest.
The government’s report showed that as of December 31, 2019, 19 SOEs and state invested enterprises which had outward investment projects and carried out production and business activities got total revenue of $7.18 billion from the projects.
The revenue was mostly from the oil and gas sector, petroleum trading, telecommunications, rubber plantation and processing.
In 2019, the total profits of the outward profitable investment projects reached $583 million, or 107 percent of 2018 ($548 million).
Meanwhile, the total loss incurred by outward investment projects was $154 million, or 45 percent of the loss incurred in 2018 ($352 million).
Telecommunications, petroleum trading, oil and gas services are the business fields which bring profits, while oil and gas exploration and exploitation, and mineral mining have the low profit rates, 11 per and 17 percent, respectively.
The oil and gas sector requires high investment capital, but many projects have been unsuccessful.
Commenting about the outward investment in 2019, the government said the performance in 2019 did not see big improvements and the investment could not reach expectations.
There are reasons behind this, such as politics and investment policies of the host countries. Besides, there are problems in management capability, risk management, maket forecast capability and experience in making outward investments.
Viettel has many profitable projects. Viettel Global, its subsidiary, has invested in 10 telecommunication networks and three R&D projects in France, the US and Russia, with total registered capital of $2.99 billion.
State-owned economic groups had registered 114 outward investment projects as of the end of 2019 with registered capital of $13.8 billion, according to the MInistry of Public Investment.
Outward investments, which fell for a short time because of Covid-19, resumed again after the social distancing policy ended.