Vietnam's Petrolimex posts heavy losses despite huge market share: auditors

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Petrolimex ran into pre-tax losses of VND1.4 trillion (US$67.2 million) in 2011.

State auditors have asked Vietnam's top fuel importer and distributor Petrolimex to review its financial management after the company made losses last year and continued to lose its market share.

The company ran into pre-tax losses of VND1.4 trillion (US$67.2 million) in 2011 while its total debts amounted to more than VND44 trillion ($2.1 billion), the Tuoi Tre newspaper reported, citing new fidings from the State Audit.

Petrolimex, with huge assets worth more than VND57.7 trillion, struggled to maintain its market share in major cities last year. State auditors found that its total share dropped to 48 percent from 49 percent in 2010 and 50 percent two years earlier due to increased competition from other distributors.

As a result, the State Audit advised the company to lower input costs and seek cheaper fuel sources through bidding.

Petrolimex should also review its investments in the banking and securities sectors, auditors said.

Audit results showed that the company had lost VND949 billion from investing in stocks as of its innital public offering in July 2011.

The fuel giant also invested more than VND1.5 trillion in the real estate, banking and insurance sectors, which auditors said requires to be assessed carefully to ensure capital efficiency.

Despite the losses, Petrolimex raised its total salary payouts by 1.6 percent last year to VND60 billion. The average salary at its headquarters was around US$1,000 per month, a high level in Vietnam, according to economists.

Le Thi Nga, deputy chairwoman of the National Assembly Judicial Committee, told Tuoi Tre in an interview published Saturday that Petrolimex and other state-controlled enterprises need to disclose their financial information to taxpayers.

"This is public money we are talking about here, not private money of any individual or any organization in particular," she said. "So it's unacceptable for the company to incur huge losses and continue to pay high salaries."

The company reported a pre-tax profit of VND1.2 trillion for 2010.

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