Not generating revenue, UDEC wants to sell or cooperate in investing in real estate projects

In 2023, the real estate business did not bring in any revenue for UDEC. The company plans to transfer or cooperate in investing in the real estate projects it owns.

The above information has just been announced by Ba Ria - Vung Tau Urban Development and Construction Joint Stock Company (UDEC; UpCOM: UDC) in the 2024 annual shareholders' meeting documents.

UDEC assessed that the real estate business is expected to show more positive signs than in 2023. Construction demand, especially domestic civil works, is forecast to remain low as capital sources such as credit and bonds for real estate businesses continue to be tightly controlled.

Many investors are expected to face cash flow difficulties when a large amount of bonds mature in 2024. Legal problems in projects, especially projects in large cities, will also need more time to resolve.

In the context of the domestic civil construction market slowing down, increasing competitive pressure among contractors, many businesses have sought work from public investment projects, expanded foreign markets, or sought profits through stock and bond investment activities.

However, bid packages from public investment projects are considered a difficult cake to swallow, because they require large capital while the unit price is low and payment procedures are complicated. The strategy of finding jobs for construction activities in foreign markets is very few Vietnamese enterprises can access.

UDEC's Nemo Hotel in Phu My town, Ba Ria - Vung Tau province. Photo: UDC

This year, the company expects total revenue to reach 350 billion VND, with after-tax profit reaching 12.5 billion VND.

In particular, the real estate investment and business sector is expected to bring in revenue of about 68 billion VND for UDEC.

The Company also plans to transfer or cooperate in investing in real estate projects that the Company currently owns. At the same time, it will focus resources and form joint ventures with businesses with financial and brand potential to implement projects on land funds that the Company currently owns.

According to the introduction, UDEC is currently investing in a number of projects such as the New Urban Area South of National Highway 51 with an area of 50 hectares and a total investment of more than 1,500 billion VND; the Long Hai coastal villa project with an area of 8 hectares and a total investment of 250 billion VND; the Phu My - Chinfon luxury residential area on an area of 3.8 hectares with an investment of 250 billion VND...

For the production and construction of hot asphalt concrete and precast concrete products, UDEC expects this segment to bring in 32 billion VND. For the construction and installation sector alone, UDEC expects to bring in 215 billion VND.

In 2023, UDEC recorded total revenue of more than 97 billion VND, a decrease of 65.53 billion VND compared to the results achieved in 2022. Despite revenue, the company recorded a loss of more than 40 billion VND.

The company explained that the parent company's revenue decreased mainly due to a decrease in construction and real estate transfer activities compared to the set plan.

The main reason for the failure of construction revenue to meet the set plan is that the company did not win any new projects during the year, and construction revenue was mainly achieved from projects carried over from the previous year.

For real estate transfer activities, the company plans to achieve revenue of VND 48.5 billion, but with the actual situation of the real estate market in 2023, the Company cannot carry out the transfer.

The decline in business results in 2023 continued into the first quarter of 2024 when the company recorded a consolidated pre-tax loss of nearly VND77 billion.

The company said that the increase in financial expenses and other operating expenses during the period caused its after-tax profit in the first quarter of 2024 to continue to be at a loss, although it did not fluctuate much compared to the loss in the same period in 2023.

Source: https://baodautu.vn/chua-tao-ra-doanh-thu-udec-muon-ban-hoac-hop-tac-dau-tu-du-an-bat-dong-san-d217439.html