PV Drilling's News

The online conversation between PVD's CEO and investors with topic : "Finding safe destinations for investment" hosted by Securities Investment Review(07/24/2008)

Nguyễn Đức Bá - - (Email: baduc_bizmen@yahoo.com)
Good afternoon Mr. Khanh
According to the release on the website of  PVD Invest, your company has planned to invest  in a  3rd drilling-rig, I just wonder if it has been committed, and how do you source the finance for that investment? What would be the impact of the currently high loan interest be to the estimated achievement of the company, and what would be the likely achievement of the 2008 business plan?   

Mr Do Van Khanh :  The contract for the 3rd drilling-rig has been signed and the rig is already under construction in Singapore. Completion is expected in Dec 2009.
30% of the total investment for the 3rd drilling-rig was shared among the shareholders, while the rest would be long-term loans offered by foreign banks. Of course, the currently high interest rate will have a certain impact on the estimated profit of the drilling, which would likely be in therange of 1.5%-3%. For the year 2008, PVD estimates to have a profit increase of 15-20% vs. planned.

Le Anh Xuan
- Bac Giang - (Email: leanh1306@yahoo.com)

Dear Mr. Khanh, I am a new shareholder of the company. During the recent price slump, I had bought PVD Stock at 72,000VND/share, I therefore felt very happy when the PVD stock price increased higher than that rate. However, currently the stock market has been going down, I wonder if your company has any strategy to stabilize the PVD stock price? Could you please share your view on what percentage is due to objective reasons and how many percent due to subjective reasons which create the decrease in stock value? Thank you.

Mr Do Van Khanh : I would like to congratulate you for  buying stocks at a good price. In all circumstances, PVD’s objectives are to achieve the best possible business result, ensure the best benefit for  the investors and shareholders. When the stock market goes down, stock prices of  listed companies will not be able to avoid the downward trend which is reflected in the whole market. When considering  plans for of increasing stock issues, paying the dividends in stocks or cash, we would take into consideration their impact to the market price of the PVD stocks, in parallel with the objective of ensuring  the development of PVD’s business to increase the long term benefit for the investors. For PVD stocks, the current going-down price is objective.

Mai Thu Huyen - Ha Noi - (Email: huyennnt@gmail.com)

To the General Director of PV Drilling:

Could you please give further details for the drilling-rig projects of your company? After PV Drilling I, when will the two projects of PV Drilling II and III be put into operation? Do you have to borrow money to carry out these projects? What are the estimated results of these projects?    

Mr Do Van Khanh : All the projects of PVD are progressing well. The offshore-rig PV Drilling I and the land-rig PV Drilling 11 have been operating with a high effeciency rate. The PV Drilling II and III, under construction in Singapore, are in line with expected progress and will be completed in Q4/2009, we are preparing a tender so that the drilling-rigs could be put into operation right after their delivery. PVD is borrowing 70% of the project’s value from the banks. The IRR of each project is about 20%.

Nguyen Thu Hang - Hai Phong - (Email: hangnttt@fpt.com.vn)

Good morning Mr. Khanh,
Very pleased to see you in this online conversation. Could you please comment on the impact of oil and gas price increase to the operation of your company? Ussually, is the business result of the last 6 months better or worse than the first six months? (I am looking at PVD stocks and very keen to have a safe investment)  

Mr Do Van Khanh : PVD is definitely affected by the increase of the input prices and operation costs. PVD had very good results during the first 6 months, the next 6 months will most likely be unable to  achieved as good a result  as the first 6 months due to inflation, price increases and a significant higher interest rate. But PVD will certainly achieve the profit at a higher rate than the plan committed to the shareholders, therefore, please give careful consideration and decision when considering investing. I Wish that you have a clever and prompt decision.   

Khánh Toàn - Nha Trang - (Email: toankh@yahoo.com)
This year, does PVD have any plan to issue more stocks? I see PVD an enterprise which has sustainable development and I am keen to put an investment in this stock. As CEO of PVD, could you please advise if I should buy PVD at the time being? With the price 90,000VND/stock, what is the P/E? What would be the EPS of the company for this year? Thank you.

Mr Do Van Khanh
: If the financial market is better for this year, PVD will issue more stocks to raise capital for the investment projects of PVD. The investors should make their own evaluation on the PVD stocks for their investment decision. For PVD, I would like to confirm that the performance of PVD will be good. At the price of 90,000VND/share, the P/E of PVD is estimated at 14.3. EPS of PVD would be estimated at around 6,300 for the year 2008.

Phạm Văn Thông
– Triều Khúc, Thanh Xuân, Hà Nội – (Email: phamthong@yahoo.com)
I would like to have a question to Mr. Do Van Khanh, General Director of the PVD Corporation (PVD). As I know, for the first 6 months, PVD has earned a profit of VND500 billion, nearly equal to the year 2007’s achievement, and 70% higher than the plan of year 2008. Would you please explain why PVD have achieved such a good result? What is the estimated profit for the last 6 months?

Mr Do Van Khanh :  PVD has achieved such good results mainly due to the very good business operation in the first 6 months, all high tech-services have experienced strong development, all drill-rigs have achieved 99% productivities (vs 90% of plan). Therefore, the profit was better than the estimated. The profit for the last six months is estimated at VND 350 to 400 billion.

Hoàng Thu Lan - TP Vinh, Nghệ AN - (Email: lanhoang73@gmail.com.vn)

According to the announcement of PVDrilling, the company’s profit for the first 6 months is VND500 billion. What is your estimation of profit for the whole year? Whether such estimated profit has taken into account the risk of financial investment of the company?

Mr Do Van Khanh : The estimated profit for the whole year would be VND850 billion. PVD does not have financial investment, therefore PVD is not exposed to any risk of financial investment.

Cao Hào Hùng
- Tây Hồ, Hà Nội - (Email: haohungmax@yahoo.com.vn)
Recently, some inside shareholders of PVD like SSI or the spouse of the Deputy General Director have sold their PVD stocks,  did they have some negative information?

Mr Do Van Khanh : In my point of view: different individuals and organization investors have different objectives, i.e. investment objectives and profit objectives. When they need money for business purposes or personal spending or other needs like settlement of a bank loan, then selling their stocks is the way to realize the profits or to cover their demands mentioned above, all are considered to be normal  practice. SSI and my colleagues in PVD did sell their PVD stocks due to their own needs. PVD has exhibitied good achievements, and all PVD operations  are performing well All of which reflects a positive condition and are not negative at all.

Dear Mr. Khanh – PVD
1- There is a comment, “State-owned shareholders – have “mountain” rights, but small responsibility”. For example, recently, the state-owned shareholder “Gia Dinh Textile Corporation” who owns 44.9% of BBT’s charted capital, when BBT suffered  big losses, resulting in a significant loss of State Money, but the representative of the State’s capital was t only dismissed as a result. What is your comment?

2- What do you think about the inflation rate by the end of 2008, what would be the annual loan interest, will there be any small brokerage house or bank declaring bankruptcy.

Thank you – Ngo Duc Hai  

Mr Do Van Khanh : “State-owned shareholder – have “mountain” rights, but little responsibility”. I do not believe that this perception is  totally correct, especially for PVD, if by stating State-owned shareholders have big rights then they would have much bigger responsibility because PVD is a high-tech company converted into a joint-stock company from a State-owned sector, all technical support, or experiences, capital sources, prestige for guaranteeing are all on the shoulders of state representatives to PVD. Therefore, the responsibility is big rather than small.

Certainly, for the person who represents State capital to hold the steering wheel of the business, if he leads the company to financial loss,, he should be, as a minimum, terminated , and consquently would lose his reputation. When CEOs take over their role, none of them would expect their companies to be underdeveloped or to suffer loss. The loss of any enterprise is due to many factors, such as the market, internal resources and the enterprise’s position, not only the leadership of the CEO.  Regarding your question concerning inflation and  bank interest I cannot comment on these areas. For PVD, the increase in inflation and bank interest rate leads to the increase of the input cost and PVD needs to excercise effective measures to ensure the growth of revenue so as to achieve the targeted profit.

Nguyễn Minh Quân - Q.1, TP. HCM - (Email: daututaichinh@fpt.com.vn)

Recently, analysts in brokerage houses advise investors to buy PVD, but the price of PVD is rather high in comparison to the market price (95,000VND/share). What is your estimation for the  lowest possible price of PVD in line with the bearish market trend? I would like to know your expectations so that I could anticipate any exposure to potential loss if buying PVD shares now. Sincerely thank you

Mr Do Van Khanh
: The price at 95,000VND/share, P/E of PVD is around 15. If we compare to the current market, this price is not high. I don’t know how the PVD share would decrease under the bearish trend as it also depends on the generic factors of the Vietnam stock market. I could just estimate that PVD would have a good business result in the year 2008, enjoy stable development, and be sustainable for many years later. I regretthat I cannot guess whether you would have profit or loss if you buy now.

Nguyễn Sỹ Hùng - - (Email: Nguyensyhung@yahoo.com.vn)
Would you tell us who are PVD’s direct competitors in PVD’s core business? I am indeed keen on making a long term investment in PVD stock but a little bit uncertain because I am not in fully aware of the core business and competitive advantages of PVD? Would PVD be able to maintain its development momentum like it has done  over 3 years?

Mr Do Van Khanh :
PVD’s direct competition comes from international drilling contractors and oil&gas service corporations. We don’t face any competition from local players in the businesses which we are in.
PVD’s competitve advantage is based on advanced technologies, cutting edge drilling rigs and equipment, excellent technical staff, and a competent management system (PVD has employed ERP management system), Additionally,PVD’management are very experienced in the international drilling service.

In the long term vision, PVD will maintain the development momentum in 2009, and achieve a breakthrough in growth in 2010, paving the way for sustainable development during the coming years.

Phạm Thanh Tuấn - Thanh Hóa - (Email: phamthanhtuan@yahoo.com)
I am a fresh graduate from the University of Mining and Geology. Is there is any chance for me to work for PV Drilling?

Mr Do Van Khanh : I have no idea what’s your major. If it’s one among drilling techniques, geophysics or oil&gas geology, you’ll definitely have a lot of opportunities to work for PVD, according to your desire and  capability to meet our requirements.

Huynh Hoa - Ha Noi - (Email: hhnm@gmail.com)

I’m an investor from Ha Noi, very impressed with PVD’s first half results. Would you compare the development of Vietnam’s drilling industry to that of others in the region? In your long term vision, apart from the vision to be the “Pioneer of Vietnam Driller”, what other businesses does PVD intend to be in?

Mr Do Van Khanh
: Vietnam’s drilling industry has developed quite well  compared to others in the region, even better than  that of Malaysia, Thailand and Indonesia. PVD doesn’t intend to expand out of its core businesses

Trần Văn Mạnh
- Vinh, Nghệ An - (Email: manhsonglam@yahoo.com)
The general meeting of shareholders of 2008 ratified the target profit of VND 700 billion, much higher than last year’s achievement of VND 572 billion, meanwhile most enterprises would consider themselves lucky if they could achieve the same amount as last year. What is the basis  for such confidence?

Mr Do Van Khanh : It’s not a matter  of whether we are confident or not, our forecast is not groundless: the profit target is part  of the well built business plan of 2008. In the first half of 2008 we have achieved almost the profit we made in the whole 2007, we are certain to exceed the target of VND 700 billion.

Kiều Thanh Tâm - - (Email: xuandoaiht@yahoo.com)
PVD has recently been awarded the prize of “ the most impressive annual report”, we are private investors, can we have that report? Rumour has it that some companies have spent billions on  annual reports; for PVD, is the cost to produce such a report considerable?

Mr Do Van Khanh : Annual reports are for all investors regardless whether private or instituational, if you are a PVD shareholder, you will be provided a copy when you  attend the meeting.

PVD has also put great effort in that report, capturing the most descriptive and transparent features of PVD. But it’s not as expensive as rumours imply. The content was developed by ourselves and the production cost was not too high.

Võ Hữu Tùng - Vũng Tàu - (Email: Tungvh@gmail.com)
Being listed already for quite a long time, what’s your advice for the enterprise planning to go to the stock exchange? In your opinion, what are the pratical values of the stock exchange to enterprises? I’m working for a small business in oil&gas, we also plan to go public, but we are very concerned over the scenario that our share price slumps once we are listed.

Mr Do Van Khanh
: Shareholders’ assured value brought by stable growth is the most important mission. Once listed, the business is supposed to improve its operational efficiency, management and transparency also to be changed for the better. Once a company attains shareholders’ understanding and belief, your share will be valued appropriately in the market. That, consequently, facilitates your mobilization of capital from the financial market for your development. That’s the great advantage of  being listed.

I think, once listed, both small or big enterprises are supposed to bear the pressure of satisfying the expectation of their investors.

Lê Ngọc Ánh
- - (Email: ngocanhsl@yahoo.com)
Realities from the stock market shows that the opportunistist/”wave surfer” can earn quite a lot while valued  investors (buy and hold) have seriously suffered losses. You personally seem to be  a valued investor, do you think that valued investors can survive in Vietnam stock market? How much have you lost so far?

Mr Do Van Khanh : The wave surfing investors tend to look for profit in short term. This investment fashion can either earn you a handsome  profit on occasions or bring you  losses another time.

I am not a professional stock trader, my investment will only make its way to entrusted stocks which are reliable enough for a long term vision.

Hoàng Dũng
- Hà Nội - (Email: dungnmt@yahoo.com)

I have always believed that PVD is a good stock. Is that belief assured? Many Vietnamese enterprises plan to go to overseas stock markets, has PVD planned this? What has made you uncomfortable when running a listed company?

Mr Do Van Khanh :
Thank you for your belief in PVD stock. Definitely your belief is assured because In the long term vision, PVD will maintain the development momentum in 2009, and achieve a breakthrough in growth in 2010, paving the way for the following years of sustainable development.

PVD plans to have its stock listed in Singapore with the view to maintaining its growth momentum of immanent value.

I haven’t seen anything that makes me uncomfortable as running such a strong listed compamy as PVD. I only feel uncomfortable when PVD fails to meet its investors’ expectation.

Hoàng Nguyên - Hà Nội - (Email: nguyenh@gmail.com)
I do take interest in the long term development vision of PVD and the possibility for PVD stock to enjoy stable increase in price. Your comments on that?

Another question for you personally, as a CEO of a big oil& gas company, considered as a “blue-chip” stock, have you ever found the burden put on your shoulder by investors untenable?

Your age? How longer would you contribute to PVD?

My wish of health to you.

Mr Do Van Khanh :
PVD’s competitve advantage is based on  advanced technologies, cutting edge drilling rigs and equipment, excellent technical staff, and a competent managment system (PVD has employed the ERP management system). Additionally,PVD’management are very experienced in the international drilling service.

PVD is currently holding a 10% share in Vietnam’s drilling market, an expansion to 30%-50% is surely possible for PVD during the coming 5-7 years. Therefore, I believe PVD stock value will increase.

By my sides are colleagues who are very competent and dedicated in taking PVD to the new stage of development so that I don’t feel any burden

Kiều Vân Hoa - Hà Nội - (Email: kieuhoa@fpt.com.vn)
Risks and challenges PVD are facing?

Mr Do Van Khanh : They are ups and downs in the economy and financial markets of the world and the region, all of which render adverse impacts to the country’s economy. Besides,  the competition from international drilling contractors also represents a considerable challenge.
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