From making a profit of hundreds of words, Hoa Binh Construction lost more than 700 billion after audit

Hoa Binh Construction Group (stock code: HBC) has just announced its semi-annual audited financial report for 2023.

Accordingly, HBC recorded net revenue of VND3,463 billion, gross profit of VND187 billion, and after-tax loss of VND713 billion.

Meanwhile, at the end of July, in the company's self-made report, HBC announced a cumulative profit of more than 101.5 billion VND for the first 6 months. Thus, the post-audit figure is 815 billion VND different from the unaudited report.

Explaining this difference, HBC representative said that the audit report did not record profits from the sale of Matec Construction Machinery Company Limited (a subsidiary in which HBC owns 100% of capital) and liquidation of fixed assets.

Previously, in the unaudited report, HBC recorded profits based on the contract value signed in June 2023, however, the acquiring partner is adjusting the payment schedule, leading to a delay in payment, expected to be made in the third and fourth quarters of 2023.

In the explanatory document sent to the State Securities Commission, HBC also said that the adjustment to reduce financial revenue mainly came from the decrease in revenue from transferring a subsidiary - Matec Construction Machinery Company Limited (VND 74.3 billion).

In addition, other profit items were also adjusted down by more than VND652 billion, mainly due to the adjustment to reduce profits from selling assets at parent company HBC.

In the above financial report, auditing unit Ernst & Young Vietnam (EY) noted that, in addition to accumulated losses, HBC has overdue loans, including some loans that have been extended by banks.

For the remaining loans that are past due or about to mature, the company is in the process of negotiating with banks to request extensions. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the Group's ability to continue as a going concern.

Recently, HBC announced to hold an extraordinary general meeting of shareholders to approve the 2022 audited financial report and the plan to issue individual shares.

The Board of Directors plans to propose to shareholders a plan to issue individual shares to convert debt. However, the extraordinary shareholders' meeting of HBC could not take place as planned because the required percentage of shareholders did not attend.

Due to insufficient attendance, Hoa Binh Construction cannot hold an extraordinary shareholders' meeting. Hoa Binh Construction Group held an extraordinary shareholders' meeting on the morning of August 26, but due to insufficient attendance, the meeting could not take place.

Source