Solar and wind power companies post heavy losses, facing an uncertain outlook

Renewable-energy firms are reporting losses or only thin profits, and financial signals are deteriorating even as global oil prices rise. Analysts note that most wind and solar projects in Vietnam operate under fixed electricity-sale prices, limiting revenue flexibility when energy markets move.

2025 results: losses widen and leverage rises

HP1C Energy Joint Stock Company (HP1C) reported a 2025 net loss of VND 180.7 billion, reversing from a profit of VND 71.3 billion in 2024. The loss is the largest since the company began reporting financials, ending a multi-year profitable period from 2021 to 2024 and indicating a clear deterioration in operating performance.

By end-2025, HP1C’s equity fell by more than VND 180 billion to VND 1,073 billion, mainly due to a sharp drop in retained earnings. The debt-to-equity ratio increased from 2.83 to 3.2x, while total liabilities rose to nearly VND 3,439 billion. Bond debt accounted for more than VND 2,100 billion, adding pressure on interest costs and long-term financial obligations.

Wind power: modest gains for some, losses for others

Wind power expansion continues, but results remain volatile. Ea Súp 1 posted 2025 net profit of about VND 66.4 billion, slightly higher than about VND 65 billion in 2024. Revenue increased from VND 880 billion in 2024 to VND 946 billion in 2025. Total debt declined from about VND 2,142 billion at end-2024 to around VND 2,041 billion at end-2025, with bank borrowings decreasing from VND 1,739 billion to about VND 1,636 billion.

HP2 Energy Joint Stock Company (HP2C) also recorded a 2025 loss of more than VND 97 billion, compared with a profit of over VND 55 billion in 2024. Equity fell from over VND 1,019 billion to just over VND 922 billion. The company’s debt rose to over VND 1,671 billion, up from 2024.

Hoa Dong Wind Power 2 (HD2C) has not yet disclosed full-year 2025 results. However, in the first half of 2025 it reported a loss of more than VND 114 billion, following a loss of more than VND 120 billion in H1 2024. Cumulatively, the firm has posted a loss of more than VND 493 billion. In 2024, HD2C lost VND 229 billion, and in 2023 it lost VND 159 billion.

HD2C and Hoa Dong 2 (Can Tho): leverage and bond exposure

As of mid-2025, equity of Hoa Dong 2 Wind Power (Can Tho) stood at just over VND 144.8 billion, while total liabilities approached VND 2,813 billion. Bank borrowings were over VND 2,713 billion, up from VND 817 billion mid-2024. By mid-2025, the company had no bond debt, whereas in the same period last year it carried over VND 1,725 billion.

According to HNX, in March 2025 Hoa Dong 2 prepaid long-term bonds totaling VND 1,730 billion.

Profitability remains thin across the sector

Many renewable-energy firms earn modest profits. Ea Súp 3, owner of the Xuan Thien Ea Sup solar plant, posted 2025 net profit of over VND 278 billion, down sharply from over VND 459 billion in 2024.

Overall, the sector’s low profitability is attributed to interest costs and depreciation that erode margins significantly. Some listed companies perform better; for example, Gia Lai Electric Power (GEG) reported robust 2025 finance-related revenue of nearly VND 306 billion. Interest costs declined sharply, lifting 2025 net profit to around VND 513 billion, up from just over VND 76 billion in 2024.

Impact and outlook: 2026–2027 bond maturities are a key test

Outlook for 2026–2027 remains challenging for several renewable-energy firms, even as global energy prices—especially oil and gas—rise. Unlike traditional energy sectors that can benefit directly from price swings, most wind and solar projects in Vietnam operate under fixed electricity-sale prices (FIT) with EVN. This effectively freezes revenue for much of a project’s life and does not reflect improvements in global energy markets.

Financing costs are also rising. Lending rates in many banks have surged, often to 8–9% per year. When bonds mature and firms need to refinance or borrow more, costs can increase sharply.

Refinancing pressure and potential cash-flow strain

A real test will come in 2026–2027 as corporate bonds mature. Many firms may face difficult choices: refinance in a tighter credit environment or buy back bonds early, both of which can place substantial pressure on cash flow. For companies with thin profit margins that have only recently broken even, resilience could be severely tested.

In addition, legal and regulatory hurdles—such as permitting, grid infrastructure, and power-purchase agreements—along with the transitional electricity-pricing mechanism (negotiations with EVN and typically below FIT) do not fully support financial improvement. With limited revenue growth and high cost of capital, some firms risk entering a cash-flow spiral where operating cash flow can cover daily operations but cannot fully meet debt service.

Analysis: sector divergence likely as balance sheets matter

Within this context, sector performance may diverge. A minority of firms with sound financial structures will likely endure, while others may need to restructure debt, defer financial obligations, or accept prolonged losses. The coming period will test not only business efficiency but also the sector’s financial endurance.