Strengthening the financial “health” of state-owned enterprises

	Amending the Law to create the best conditions for state-owned enterprises
	Nineteen State-owned enterprises estimate pre-tax profit of over 2 bln USD

The scientific workshop was organized by the Editorial Board of Communist Magazine in coordination with the State Capital Management Committee at Enterprises and the Party Committee of the Central Enterprises Bloc.

According to the State Capital Management Committee at Enterprises, to date, the country has six hundreds and seventy one SOEs including 6 economic groups, 53 state-owned corporations and 19 LLCs operating under the parent-subsidiary model.

Of which, although accounting for only more than 10% in quantity, the group of corporations, corporations and parent-subsidiaries plays an important economic role, holding 92% of total assets and 90% of total equity, 93% of total revenue and 85% of total state budget contributions of SOEs nationwide.

Accumulated nine months, pre-tax profit of nineteen corporations and general companies is estimated at nearly 85,887 billion VND, equal to 105% of the yearly plan.

The scientific workshop was organized by the Editorial Board of Communist Magazine in coordination with the State Capital Management Committee at Enterprises and the Party Committee of the Central Enterprises Bloc.

Speaking at the scientific workshop "Enhancing the role of the state economic sector in the socialist-oriented market economy in Vietnam - Practice of Vietnam Airlines Corporation - Vietnam Airlines" held on November 10, 2024, Mr. Nguyen Ngoc Canh, Vice Chairman of the State Capital Management Committee at Enterprises, emphasized the role of the state economy.

However, according to Mr. Canh, to enhance the role of the state economic sector in the socialist-oriented market economy in Vietnam, it is necessary to strengthen the financial "health" and competitiveness of state-owned enterprises.

From the practice of Vietnam Airlines, as a national airline, the severe consequences of the Covid-19 pandemic and the general difficulties of the economy have had a negative impact on Vietnam Airlines.According to Vietnam Airlines' Q3/2024 financial report, after nine months, consolidated profit after tax reached more than VND 6,263 billion, while in the same period last year, it lost more than VND 3,534 billion.

Vietnam Airlines said that this result was thanks to the restoration of the entire domestic flight network and most international routes, opening new routes and increasing exploitation activities during the peak summer period.

However, according to Vietnam Airlines' leadership, many difficulties have not yet fully recovered, so they still need continued attention, investment and strong support.

Currently, Vietnam Airlines has completed the Overall Restructuring Project for the period 2021-2025 to report to shareholders and competent authorities for consideration and approval.

According to the Project, it is expected that by 2025, the financial situation of the parent company Vietnam Airlines will gradually improve, no longer have negative equity, profitable business results, and have a source of funds to repay part of the debts that have been extended or postponed.

According to Vietnam Airlines' leadership, many difficulties have not yet fully recovered.

Therefore, experts believe that, in addition to self-efforts, this process needs the support and accompaniment of the Government and state management agencies.

Among them, there is a proposal to allow the Prime Minister to assign Vietnam Airlines and member enterprises with 100% charter capital owned by Vietnam Airlines as investors in projects under "Component Project 4 - Complex of synchronized aviation service works at Long Thanh International Airport".

Looking at other SOEs, Dr. Truong Van Phuoc, former acting Chairman of the National Financial Supervision Committee, said that the most decisive issue is still the mechanism and institution.

Specifically, these are the regulations on additional investment of state capital in joint stock companies and limited liability companies with two or more members.

In addition, to have powerful economic groups and state-owned corporations, in addition to applying advanced and modern corporate governance principles, a professional management and executive team is needed.

“SOEs need to accelerate and promote the restructuring process. The State supports with institutions and resources for the state economic sector to develop production capacity and create effective business incentives,” Dr. Truong Van Phuoc stated.

Economic expert Assoc. Prof. Dr. Ngo Tri Long also suggested promoting the public-private partnership (PPP) model to encourage forms of cooperation between SOEs and the private sector to increase investment efficiency.