Song Da 7.02 (S72) Q3 2026: Net Profit Falls 13% on El Nino Drought

Overview

Song Da 7.02 (ticker S72), the UPCOM-listed operator of the 8 MW Nam Thi 2 hydropower plant in Lai Chau province, became the first Vietnamese listed company to publish Q3/2026 financial statements. Net revenue fell 12% year on year to VND 10 billion and net profit fell 13% to VND 2.5 billion, with the company attributing the decline to El Nino-driven drought and higher equipment repair costs.

Key Facts

• Q3/2026 net revenue: VND 10 billion, down 12% versus Q3/2025.
• Q3/2026 net profit after tax: VND 2.5 billion, down 13% year on year.
• Cost of goods sold: VND 6 billion, down 9%; gross profit VND 4 billion, down 15%.
• Nine-month 2026 net revenue: over VND 27 billion, down 7%; net profit VND 5.4 billion, down 26%.
• Basic earnings per share: VND 449 for 9M/2026 versus VND 606 a year earlier.
• Total assets at 30 September 2026: VND 202 billion, down 3% from the start of the year; cash and equivalents VND 2.85 billion, down 25%.
• Total borrowings and finance leases: VND 47 billion, down 18% (VND 10.5 billion), split VND 12.7 billion short term and VND 34.2 billion long term; equity VND 133 billion.

What Happened

In its filing and accompanying explanation, Song Da 7.02 said Q3/2026 was affected by cyclical El Nino conditions, with dry weather and lower rainfall than in Q3/2025. The water shortage reduced commercial power generation output and revenue at the Nam Thi 2 plant, located in Binh Lu commune, Lai Chau province. The company also reported that repair and replacement costs for plant equipment rose year on year, noting the facility has been generating for more than eight years and that some equipment is worn or damaged.

Finance costs for the quarter, entirely interest expense, exceeded VND 1 billion, down 12%, while general and administrative expenses fell 6%. On the balance sheet, liabilities declined 15% from the start of the year to VND 68.6 billion, and the company continued to pay down debt. Song Da 7.02 traces its origins to a branch of Song Da Construction Company 7 in Hoa Binh under Song Da Corporation, equitised in 2004 and merged with Nam Thi Hydropower JSC in Lai Chau in 2009.

Market Context

S72 trades on UPCOM, Vietnam’s unlisted public company market, and last closed at VND 5,100 on 11 October 2026. The stock sits in the small-cap hydropower segment, where earnings are directly geared to hydrology rather than to grid demand or tariffs. The Q3 result is the first read on the 2026 third-quarter reporting season for Vietnamese listed companies, though S72’s VND 202 billion balance sheet makes it a marginal indicator for the broader market.

Strategic Significance

The investment case for S72 rests on a single 8 MW asset with limited growth optionality, so the key variable is water, not capital allocation. The 26% nine-month profit decline shows how quickly El Nino conditions can erode earnings at an ageing plant, and the rising repair bill signals that maintenance capital expenditure will compete with debt service and any dividend capacity. The offset is a deleveraging balance sheet: borrowings are down 18% year to date and equity of VND 133 billion still covers debt comfortably, giving the company room to absorb a weak hydrological year without a refinancing strain.

What to Watch

• Hydrological data for the Lai Chau basin and any El Nino to La Nina transition in late 2026 and 2027.
• Q4/2026 and full-year 2026 results, which will show whether the repair-cost increase is a one-off or a recurring trend.
• Further debt repayment and the short-term borrowing balance of VND 12.7 billion at the next reporting date.
• Any disclosure on equipment overhaul schedules or capital expenditure at the Nam Thi 2 plant.
• Liquidity in S72 shares on UPCOM, given the small free float and thin trading volumes.