REE's earnings in 2006 tripled

Over the next three years, the Refrigeration Electrical Engineering Corporation (REE) plans to increase its charter capital to VND2 trillion (US$125 million), up five times over the current level, through continued revenue growth and branching out into new areas.

Last year, the company earned VND824.14 billion (about $51.5 million) in revenue, more than triple that of 2005, with pre-tax profits at nearly VND299 billion ($18.69 million).

Earnings grew, says REE chairwoman Nguyen Thi Mai Thanh, due to strong gains in all business areas - mechanical and electrical engineering (M&E), air-condition and home appliance sales, real estate and financial investments.

Financial investments alone contributed VND149.2 billion ($9.33 million) to profits, representing 50 per cent of earnings from the four above mentioned areas.

Much of the revenue growth was through newly established subsidiaries. The company spent VND70 billion ($4.38 million) to set up REE Land JSC, and VND11 billion ($687,500) to create REE Electricity JSC. The parent owns 70 and 30 per cent in the subsidiaries respectively.

Thanh says the company will continue to expand its business activities, helping achieve its VND2 trillion chartered capital target by 2010. REE plans to invest in public infrastructure - such as electricity utilities, waterworks and mining - and invest further in existing ventures.

REE has already committed nearly $1 billion to building new hydro and thermoelectric power plants, and has helped establish the REE-Chuong Duong Land Corp with VND160 billion in charter capital.

The company will issue more shares on the stock market over the next three years.
"In this period, we will gradually equitise our affiliates to mobilise new resources and broaden the scale of these companies," said Thanh. REE predicts 2007 revenue to hit VND1 trillion ($62.5 million) with VND340 billion ($21.25 million) in pre-tax profits.

By 2010, the company forecasts earnings to reach VND2.6 trillion ($162.5 million) and profits of VND900 billion ($56.25 million).

Source: VNS