PVD Update – OUTPERFORM

PetroVietnam Drilling and Well Service Corp. (PVD VN)

PVD reported Q2/2025 business results with NPAT reaching VND250 billion (+92.3% YoY and +74.8% QoQ), in line with our expectations. For the cumulative 6M2025 period, NPAT increased by 40.5% YoY to VND394 billion, fulfilling 74.4% of the company’s full-year target and 47% of ACBS’s previous forecast. Rating OUTPERFORM.

PVD released its Q2/2025 financial statements, reporting revenue of VND2,430 billion (+7.8% YoY) and NPAT of VND250 billion (+92.3% YoY). This increase was driven by:

• Revenue from well technical services rose by 72.5% YoY. The gross profit margin of this segment also improved to 24%, from 21.9% in the same period last year.
• Financial expenses decreased by 31% YoY, mainly due to lower foreign exchange losses and reduced interest expenses as a result of lower loan principal.
• Profit from joint ventures and associates reached VND15.3 billion (compared to a loss of VND4.8 billion in the same period last year).
• Other income reached VND 44.9 billion, versus a loss of VND11.5 billion in the same period last year.

These positive developments offset the negative impact from the drilling service segment, where revenue declined by 12% YoY and gross margin fell to 20.9% from 22% YoY, due to major maintenance activities on PVD III and PVD VI rigs.

For the cumulative 6M2025 period, net revenue reached VND3,950 billion (-2.2% YoY) and NPAT hit VND394 billion (+40.5% YoY). Profit growth from the well technical services segment offset the decline in the drilling service segment.

Outlook

For the full year 2025, we revise our revenue forecast to VND9,781 billion (+5.3% YoY) and NPAT to VND884 billion (+27.4% YoY), up 3% and 10%, respectively, compared to our previous projections. The drilling service segment is expected to recover in the second half of 2025, supported by the return of rigs PVD III and PVD VI, as well as the earlier-than-expected contribution from rig PVD VIII and leased external rigs.

However, with Brent oil prices projected to remain low at USD 68/barrel, the outlook for rig day rates remains risky, despite strong demand for upstream activities. Using the Discounted Cash Flow (DCF) method, we value PVD at a target price of VND25,500/share by the end of 2025.