PVD Update – OUTPERFORM

PVD announced Q4/2024 financial statements with revenue reaching VND2,788 billion (+59.6% YoY) and NPAT of VND232 billion (+19.7% YoY). Despite a decrease in gross profit margin to 12.9% from 22.8% in the same period last year, the growth in NPAT did not come from its core business operations but from: (1) a 47.4% YoY decrease in financial expenses to VND41 billion, thanks to lower interest expenses and exchange rate losses, and (2) other profits of VND50.3 billion compared to a loss of VND10.2 billion in the same period last year.

For the full year 2024, PVD achieved revenue of VND9,288 billion (+60% YoY) and NPAT of VND694 billion (+27.2% YoY). The rig day rate of PVD’s jack-up rigs is estimated to have increased by 18.3% YoY, and contributions from two leased rigs (Hakuryu-11 and BORR-THOR) supported these results. These factors offset a decline in profit from joint ventures and associates (-25.2% YoY) and the absence of extraordinary profit (compared to VND142 billion in 2023).

PVD acquired a used jack-up rig (PVD VIII) in December 2024 and is currently reactivating it. This process is scheduled to complete by August 2025 and we expect PVD VIII will start to contribute to PVD’s profit from Q4/2025.

2025 Outlook: We project PVD will continue to extend growth, with revenue reaching VND9,497 billion (+2.3% YoY) and after-tax profit of VND814 billion (+17.3% YoY). These projections are driven by (1) the projected rental price of self-elevating rigs staying high, (2) PVD’s owned rigs along with two outsourced rigs having full operational schedules, (3) the drilling services segment still benefiting from increasing domestic oil and gas activities looking forward.

Using the Discounted Cash Flow (DCF) method, we value PVD at a target price of VND 29,200 per share by the end of 2025, equivalent to a total return of 18.0%.