Bloomberg News

REE 2012 Profit May Rise 15% on Vietnam Power, Property Push

October 05, 2011

(Updates with stock price in fifth paragraph.)

Oct. 5 (Bloomberg) -- Refrigeration Electrical Engineering Corp., the Vietnamese maker of Reetech air-conditioners, expects profit and sales to rise 15 percent next year as it invests in hydropower and real estate to pare its reliance on manufacturing.

“Our portfolio, both now and in the near future, is looking good,” General Director Nguyen Thi Mai Thanh said in an interview in Hanoi yesterday. The Ho Chi Minh City-based company has stakes in Thac Ba Hydropower Joint-Stock Co. and Thac Mo Hydropower Plant Joint-Stock Co., as well as investments in banking and real estate.

The company also expects to rebound from less-than-forecast first-half earnings to meet its 600 billion dong ($29 million) target for pretax profit this year as falling interest rates boosts earnings at affiliates. Vietnam’s economy expanded 6.1 percent in the third quarter, quickening from a 5.7 percent growth in the preceding three months.

“We’re hoping investment income will speed up in the third and fourth quarters,” Thanh said. REE’s affiliates are on course to meet full-year targets and the company will also complete some investments in final months of the year, she said, without elaboration.

REE rose 1.8 percent to 11,300 dong in Ho Chi Minh City today, the biggest jump since Sept. 22. The company has fallen 36 percent this year, compared with a 14 percent decline for the benchmark VN Index.

The company expects to achieve its 200 billion dong full- year pretax target for investments, Thanh said. Earnings at the company’s mechanical and electrical engineering operations and its real-estate leasing unit met or surpassed expectations in the first six months, she said.

Company-wide pretax profit was 211.6 billion dong in the first half, according to a financial report on REE’s website. For the whole of 2010, the company made a pretax profit of 467.8 billion dong, according to its annual report.

--Diep Ngoc Pham. Editors: Neil Denslow, K. Oanh Ha

To contact Bloomberg News staff for this story: Diep Ngoc Pham in Hanoi at dpham5@bloomberg.net

To contact the editor responsible for this story: K. Oanh Ha at oha3@bloomberg.net


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