Some post hundred-billion-dong profits while others lose nearly VND1 trillion under debt burden

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After a boom period, many renewable energy companies in Vietnam are facing mounting financial pressure. Photo: Thach Thao

Trung Nam Tra Vinh Solar Power JSC has reported its 2025 business results, posting nearly VND208 billion ($8 million) in after-tax profit, a notable increase from more than VND160 billion ($6.1 million) a year earlier.

The result helped the company gradually narrow its accumulated losses to nearly VND526 billion ($20.2 million) by the end of 2025, improving significantly from more than VND759 billion ($29.1 million) at the end of 2024.

The company’s financial picture also showed several positive shifts.

Equity rose from more than VND750 billion ($28.8 million) to over VND1.023 trillion ($39.2 million).

Outstanding bank debt fell sharply from nearly VND3.126 trillion ($119.8 million) to just over VND1.872 trillion ($71.8 million).

Bond debt also declined from nearly VND25.5 billion ($978,000) to more than VND20.5 billion ($786,000).

Other liabilities dropped from nearly VND737 billion ($28.2 million) to around VND480 billion ($18.4 million).

The debt-to-equity ratio improved significantly from 5.55 times to 2.49 times, while the short-term liquidity ratio rose from 0.52 to 2.06 times.

These indicators suggest that the company’s financial pressure has eased somewhat after a difficult period.

Trung Nam Tra Vinh currently has one bond lot, coded TVSCH2123001, that has matured and is no longer in circulation.

The bond was issued with a value of VND400 billion ($15.3 million) and matured at the end of 2023, with only an insignificant amount of principal still outstanding.

The Trung Nam Tra Vinh Solar Power project was built in Tra Vinh Province, with construction beginning in January 2019.

The plant has a capacity of around 140 MW, spans more than 171 hectares, and uses over 440,000 solar panels.

It generates around 250 million kWh of clean electricity annually, benefiting from Tra Vinh’s relatively high solar radiation levels.

However, elsewhere within the Trung Nam Group ecosystem, the picture looks dramatically different at Trung Nam Thuan Nam Solar Power Co., Ltd.

The company posted a loss of more than VND969 billion ($37.1 million) in 2025, reversing from a profit of around VND138 billion ($5.3 million) the previous year.

The result came as a major shock after earlier signs of recovery following years of losses.

The new loss pushed Trung Nam Thuan Nam’s accumulated losses to more than VND1.818 trillion ($69.7 million) by the end of 2025.

Its equity plunged from more than VND1.562 trillion ($59.9 million) to just around VND593 billion ($22.7 million).

One major reason behind the company’s struggles is that its project falls within the group of 173 renewable energy projects facing disputes over FIT pricing, leaving part of its electricity output unpaid or only partially settled.

Heavy investment and high interest costs continue to erode profits

The pressure is not limited to companies linked to Trung Nam Group.

Many solar and wind power firms are also dealing with steep profit declines or prolonged losses.

Hong Phong 1 Energy JSC reported an after-tax loss of VND180.7 billion ($6.9 million) in 2025, compared with a profit of VND71.3 billion ($2.7 million) a year earlier.

It marked the company’s largest loss since it began publishing financial statements and ended a multi-year profitable streak from 2021 to 2024.

By the end of 2025, the company’s equity had fallen by more than VND180 billion ($6.9 million) to VND1.073 trillion ($41.1 million).

Its debt-to-equity ratio climbed from 2.83 to 3.2 times, while total liabilities reached nearly VND3.439 trillion ($131.8 million).

Bond debt alone accounted for more than VND2.1 trillion ($80.5 million), placing heavy pressure on borrowing costs and long-term financial obligations.

A similar situation unfolded at Hong Phong 2 Energy JSC.

The company posted a loss of more than VND97 billion ($3.7 million) in 2025, compared with a profit of over VND55 billion ($2.1 million) the previous year.

Equity fell from more than VND1.019 trillion ($39.1 million) to over VND922 billion ($35.4 million).

Total liabilities rose to more than VND1.671 trillion ($64 million).

In the wind power segment, Hoa Dong 2 Wind Power has yet to publish full-year 2025 results, but the company already reported a loss of more than VND114 billion ($4.4 million) in the first half of the year, following a loss of more than VND120 billion ($4.6 million) in the same period a year earlier.

Cumulatively, the company has lost more than VND493 billion ($18.9 million).

Previously, it posted losses of VND229 billion ($8.8 million) in 2024 and VND159 billion ($6.1 million) in 2023.

Some companies such as Ea Sup 1 and Ea Sup 3 still remained profitable in 2025, but earnings were limited to only tens or hundreds of billions of dong.

Given the enormous scale of investment, analysts consider profit margins at these companies relatively low.

According to analysts, the renewable energy sector’s biggest challenge lies in its capital-intensive business model combined with limited revenue growth.

Most wind and solar projects operate under fixed FIT electricity pricing agreements with EVN, restricting revenue expansion across most of a project’s lifecycle.

At the same time, companies rely heavily on borrowing to finance plant construction, keeping financial costs persistently high.

Deposit interest rates at many banks have climbed to 8-9% per year, further increasing funding pressure, particularly for companies seeking refinancing or new loans.

The 2026-2027 period is expected to become a major stress test for many renewable energy firms as large volumes of corporate bonds mature.

With the credit market becoming more cautious, companies may face pressure to restructure debt or repurchase bonds before maturity, creating significant strain on cash flow.

In addition, legal bottlenecks related to project procedures, transmission infrastructure, and transitional electricity pricing mechanisms remain unresolved.

Transitional power prices are generally lower than the previous FIT rates, limiting companies’ ability to improve revenue.

As revenue growth slows while capital costs remain elevated, many renewable energy firms are coming under mounting cash flow pressure.

Although operations continue, the ability to service debt and expand investment in the coming years will be a major test for the sector.

Manh Ha