Formerly a state-owned enterprise, REE Corporation became a public company in 1993 and was the first to be listed on the Ho Chi Minh Stock Exchange in 2000 under the ticker REE. The company operates in the energy, mechanical and electrical services, water and environment, and real estate sectors.
In the first half of 2024, REE’s revenue reached US$161.5 million, down 11.5 percent year-on-year, and profit decreased by 32.3 percent. This decline was primarily attributed to a downturn in the energy segment, which accounts for approximately 48.1 percent of total revenue.
This is partly due to the El Niño phenomenon which has seen drought-conditions in parts of Vietnam, reducing water in hydropower catchments. Additionally, a government policy prioritizing coal-fired thermal power plants to conserve water during the dry season has limited hydropower’s participation in the electricity market.
However, there is optimism for the second half of 2024 and in 2025. El Nino’s sister weather pattern, La Nina, has returned and brought substantial rainfall, improving hydrological conditions and creating better operating conditions for hydropower plants. This could boost REE’s hydropower output and improve the overall performance of the energy segment.
Of note, REE owns the largest hydropower portfolio among publicly traded energy companies, with a capacity of 1,364 MW by the end of 2023.
For contrast, mechanical and electrical engineering subsidiary, REE M&E, specializing in mechanical, electrical, and plumbing systems for infrastructure projects, experienced a positive performance in the first half of 2024. Its revenue experienced an increase of 13.4 percent year-over-year.
Additionally, REE M&E recorded a total value of newly signed contracts of US$125.6 million by the end of the second quarter, primarily fueled by the Long Thanh International Airport project.
Mechanical and electrical services, water and environment, and real estate sectors contributed 36.8 percent, 14.8 percent and 0.3 percent to total REE’s revenue in the first half 2024, respectively.
Disclosure: The author does not have any financial interest in REE stock.