Letter from CEO of PVI

10:42' SA - Friday, 29/05/2015

Ladies and Gentlemen,

2016 presented a number of challenges to the Vietnamese economy, slowing economic growth to 6.21% (compared with the expected of 6.7%). Both the market and the finance - insurance industry were heavily affected by the prolonged slump in oil prices (to around $40 a barrel) and by global political turmoil. In addition, the low interest rate of 5.8-6% in 2016 also negatively affected PVI's financial investment.

However, thanks to the restructuring strategy, applying the model of Finance - Insurance, and with the effort, effort, spirit of unity and unity, PVI has overcome numerous challenges, successfully achieved the objectives assigned in the General Shareholders Meeting: Total consolidated revenue reached 9,163 billion, achieving 108% of the plan; Profit before tax reached VND 714 billion, achieving 140% of the plan; Profit of parent company reached VND 637 billion, completing 209% of the plan; Expected dividend payout ratio was 20%.

In 2016, the core business of PVI continued to achieve outstanding results:

Regarding non-life insurance business, although the industry was heavily influenced by low oil prices, and traditional sales fell more than 50%, PVI Insurance continued to retain the leading position in the non-life insurance market in Vietnam (holding 18.65% market share), professional profits were consistently the highest among the top 5 leading insurance companies. Total revenue reached VND 7,912 billion, achieving 102% of the plan. AM Best's credit rating maintained at B ++.

Regarding its reinsurance business, PVI’s risk assessment procedure was highly appreciated by the market, highlighting the product difference and increasing the premium of PVI Reinsurance, arranging safety of large clients' programs and ensuring efficiency for PVI. Total revenue reached VND 1,708 billion, achieving 102% of the plan; Profit before tax reached VND 138 billion, achieving 102% of the plan; Guaranteed dividend payout ratio was 14%. AM Best's credit rating maintained at B +.

In the field of investment and asset management, Operating under the Finance - Insurance model, financial investment activities in 2016 generated the main source of profit for PVI. Investment activities at PVI were implemented effectively, ensuring security for assets, cash flow of PVI.

PVI has completed the year of 2016 with remarkable achievements in business indicators, and PVI's brand continued to be highly appreciated by domestic and international organizations: the prestigious Forbes Vietnam magazine voted PVI as one of the best 50 companies listed on the Vietnam Stock Exchange (2014, 2016) and one of the 40 most valuable brand names in Vietnam (2016); For the second consecutive year, it was one of the top 30 most valued Vietnamese companies by Brand Finance; For 4 consecutive years, HNX voted PVI as one of the 30 most transparent companies in HNX.

PVI will continue to face numerous challenges of the whole oil and gas industry in 2017 since the oil market, despite showing some positive signs, still remained unstable. The implementation of international agreements and integration into international markets will be a major challenge for PVI in 2017 when it has to constantly improve its financial capacity and competitiveness against domestic and foreign enterprises.

With the strategic orientation of building PVI into a regional financial insurance corporation, in 2017, PVI will focus on implementing the following major objectives and solutions:

- Enhancing management capacity: Continuing to improve the capacity of management and operation of the system, meeting international standards, ensuring transparency and professionalism. With the policy extending full ownership rights for foreign investors, foreign strategic investors will directly join PVI and enhance the management capacity of the company.

- Improving financial capacity: Implementing the restructuring model to acquire depth and efficiency, increasing charter capital, seeking strategic shareholders for PVI Insurance and PVI Reinsurance.

- Enhancing business efficiency: Focusing on improving the quality of consultancy and after-sales services, promoting the development of insurance for projects outside the traditional and retail sectors to achieve sustainable growth. PVI AM and VAD focusing on the role of financial investment and asset development, taking advantage of the investment opportunities to fulfill their profit potential.

- Empowering human resources: Implementing the strategy of human resource management and development for PVI system in the period of 2016-2020, meeting the requirements of human resources for the new development stage.

- Enhancing the application of information technology: organizing information technology activities in the centralized management model to enhance the application of information technology to meet the development requirements of the whole system, upgrading, renovating and developing infrastructure, improving management software system, business software in PVI system.

On behalf of PVI's Board of Directors, I would like to send my best regards and sincere thanks to the State Management bodies, Vietnam Oil and Gas Group, our valued customers, our domestic and international partners, all members of staff, and shareholders and investors for your trust and co-operation throughout the development of PVI, maintaining the cooperative spirit; and in the near future, PVI will be ranked among regional and global leading finance - insurance institutions.


Bui Van Thuan


PVI Share