Among the strongest performers was state-owned Petrovietnam's subsidiary PV Power (HoSE: POW), which posted a 175% jump in Q1 net profit to VND1.3 trillion ($49.34 million), its highest quarterly earnings since Q2/2018. Revenue rose 51% year-on-year to nearly VND12.33 trillion ($467.9 million), according to the company's financial statements.

Despite higher gas and coal costs linked to geopolitical tensions in the Middle East, PV Power's gross profit margin improved to 15% from 10% a year earlier, helping gross profit more than double to over VND1.8 trillion ($68.47 million).

Its member unit, Nhon Trach 2 Power JSC (HoSE: NT2) reported a nearly fivefold increase in net profit to VND180 billion ($6.83 million) as commercial electricity output rose 61%, while depreciation expenses declined 78% and financial income increased 85%.

State-controlled power generator EVNGENCO 3 (HoSE: PGV) reported strong earnings growth, with Q1 net profit surging more than sevenfold to VND738 billion ($28 million). While revenue edged lower, reduced production costs and lower financial losses helped improve the gross profit margin from 8.4% to 11%, and gross profit increased by 28% to nearly VND1.15 trillion ($43.54 million).

The company also benefited from lower interest expenses, reduced foreign-exchange losses and higher dividend income from investments.

Several other listed power companies posted solid earnings growth during the quarter, including Refrigeration Electrical Engineering Corp (REE) (up 15%), PC1 Group (up 86%), Pha Lai Thermal Power (up 83%), and Thac Ba Hydropower (up 100%).

Gia Lai Electricity JSC (HoSE: GEG) was among the few exceptions, reporting a 57% decline in Q1 profit. However, the company said the comparison was distorted by one-off revenue booked in the same period last year from its Tan Phu Dong I wind power project.

Rising electricity demand has been a key driver of the sector's performance.

According to a report by brokerage MB Securities (MBS), Vietnam's total electricity output increased 7.2% in the first quarter from a year earlier. Gas-fired generation rose 17% as several power plants recovered from a low base (Phu My, Nhon Trach 1 và 2 remarkedly recovered while Nhon Trach 3 and 4 also contributed to the output), while coal-fired output was broadly unchanged. Hydropower generation increased modestly as rainfall remained close to historical averages.

Demand has continued to accelerate in the second quarter as Vietnam enters the peak summer season. Electricity consumption is projected to increase significantly, especially in industrial zones and major urban areas.

In May, temperatures in northern Vietnam reached as high as 40-42 degrees Celsius (104-108 degrees Fahrenheit), prompting record electricity consumption. The National System and Market Operator (NSMO) said both peak load and total power consumption in the national grid and northern region reached new highs for 2026 as prolonged heat conditions boosted demand.

Vietnam's National Center for Hydro-Meteorological Forecasting has forecast a 95% probability that El Nino conditions will return from June, raising the risk of hotter weather and more extreme climate conditions during the summer months.

Analysts expect sustained demand growth to support earnings for power producers in the coming quarters. However, geopolitical tensions, particularly conflicts in the Middle East, still pose a risk of increasing transportation costs and input fuel costs such as coal, oil, gas, and energy equipment.

MBS said domestic gas prices remained around $8.5-9 per million British thermal units (MMBtu) in the first two months of the year and could rise further alongside global oil prices. Asian LNG prices have nearly doubled since the start of the year to around $18-19/MMBtu, while imported coal prices have risen roughly 30% since the outbreak of conflict in the Middle East.

Despite strong Q1 earnings and favorable demand prospects, electricity stocks have struggled to attract stock market investor interest.

Shares of EVNGENCO 3 have fallen from around VND26,000 in early March to VND23,100 ($0.88), while PV Power has declined from VND16,550 to VND13,550. Gia Lai Electricity shares have also retreated from about VND17,000 to VND13,950.

Analysts said the sector could regain market attention if electricity demand remains elevated and Q2 earnings continue to improve. However, further increases in fuel costs could weigh on profit margins and remain a major risk for investors.