Real estate company borrowed 127 billion VND but nearly 50 billion VND was... borrowed from the chairman.

Nam Ha Noi Housing and Urban Development Investment Corporation (stock code: NHA) has just announced its financial report for the fourth quarter of 2023 with many notable points, especially regarding debt issues.

At the end of 2023, the total assets of this enterprise were recorded at VND 684.7 billion, a slight decrease of 2% compared to the beginning of the fourth quarter. The largest proportion of total assets was unfinished construction costs at VND 430.4 billion, equivalent to 62.9%, an increase of 12% compared to the beginning of the year.

The explanation shows that the unfinished basic construction costs are concentrated in the Investment Project to build the road connecting Hoa Mac intersection to DH05 road in Yen Bac commune and Hoa Mac town (179.9 billion VND) and Hoa Mac Hotel Project (177.7 billion VND). These two projects are being implemented by the enterprise in Ha Nam province.

The company's total liabilities at the end of 2023 were VND252.6 billion, down about 7% compared to the beginning of the fourth quarter. Of which, short-term payables to sellers decreased the most by 63%, from VND45.7 billion to VND16.7 billion.

Short-term debt was VND98.6 billion as of December 31, 2023, an increase of 51.7%. Long-term debt was VND28.2 billion, down 6.9% compared to the beginning of the year. Thus, total debt at the end of 2023 was VND126.8 billion, an increase of 33%.

Công ty địa ốc vay nợ 127 tỷ đồng nhưng gần 50 tỷ đồng là... vay chủ tịch - 1 — The company's chairman and a related company lent nearly 46% of the outstanding debt as of the end of 2023 to the Hanoi South Housing and Urban Development Investment Corporation (Photo: Financial Statements).

The financial statement notes said that the year-end debt increased mainly due to outstanding debt of VND58 billion from related parties, VND48 billion from Chairman of the Board of Directors Nguyen Minh Hoan, and VND10 billion borrowed from Thanh My Development Joint Stock Company (Mr. Hoan is Chairman of the Board of Directors).

In 2022, this enterprise borrowed 3 times from Mr. Hoan and Thanh My Development Joint Stock Company to supplement working capital for production and business activities.

Thus, outstanding loans to the Chairman and companies related to the Chairman account for about 45.7% of the total VND 126.8 billion in loans at the end of the year.

The company also announced the interest paid for this loan. Specifically, in 2023, the company paid more than 2 billion VND in interest to Mr. Nguyen Minh Hoan. The interest paid in 2022 was 1.7 billion VND. The company also paid Thanh My Development Joint Stock Company about 368.5 million VND in interest in 2023.

Công ty địa ốc vay nợ 127 tỷ đồng nhưng gần 50 tỷ đồng là... vay chủ tịch - 2 — Nam Ha Noi Housing and Urban Development Investment Corporation paid more than 2 billion VND in interest in 2023 to the Chairman of the Board of Directors (Photo: Financial Statements).

As of December 31, 2023, Mr. Nguyen Minh Hoan owns more than 10 million NHA shares, equivalent to the actual contributed capital value of VND 100.9 billion, accounting for 23.92% of the company's equity.

Regarding business results, in the fourth quarter of 2023, this real estate company earned VND 27.5 billion in net revenue, down 23.8% compared to the same period in 2022. Most of which was revenue from real estate trading (VND 22.8 billion). The company explained that real estate revenue improved thanks to the sale of land plots in the Moc Bac Residential Area Project.

Thanks to low cost of goods sold (down 60.3%), the company had a gross profit of VND 15.6 billion in the fourth quarter of 2023, 2.6 times higher than the same period last year. Gross profit increased sharply because the gross profit margin of real estate business activities was much higher than that of construction activities.

The company's accumulated net revenue for the whole year of 2023 was VND 73.2 billion, down 32.4% compared to the previous year. However, due to a sharp 44.8% decrease in the cost of goods sold for the whole year, the gross profit margin for the whole year of 2023 was VND 23.1 billion, up 32%.

In 2023, the company's expenses will remain unchanged or increase slightly, such as a 6.5% increase in administrative expenses. Other profits in 2023 will be VND889.4 million, a significant improvement from a loss of nearly VND31 million in 2022.

After deducting expenses, this business's after-tax profit is more than 6 billion VND, 3.2 times higher than in 2022.

Source