Land prices are no longer "hot"; Vinhomes net profit is 9% in the second quarter of 2024

Land prices are no longer "hot"; Vinhomes net profit is 9% in the second quarter of 2024

Ha Tinh has more than 300 projects behind schedule; Da Nang has 6 real estate projects that need to be resolved; Phat Dat's profit decreased by 81% because "the market is still difficult"; D2D lost 6.3 billion VND in the second quarter of 2024.

Land prices are no longer "hot"

“When the new real estate laws come into effect, the land segment will gradually return to being the ‘king of investment channels’.” This is the latest forecast of the Vietnam Association of Realtors (VARS) in the market report for the first 6 months of 2024.

Land is still in the investment appetite of many people. Photo: Dung Minh

The above assessment is well-founded when the transaction volume of low-rise and land segments in the second quarter of 2024 recorded an increase of 60% compared to the previous quarter. However, the current price level has not peaked as in the first quarter of 2024, but has gradually begun to stabilize again.

For plots of land priced under VND2 billion in some northern provinces, the price only increased by about 5-10%. Land prices in the southern region even remained stable.

Delving deeper into the suburban land segment, VARS said that the transaction volume recorded an increase but was not really vibrant. However, the market has seen more investors "hunting" for land and proactively building houses on plots for business purposes.

“Some areas have seen localized growth in transactions and then stagnation, including the suburbs of Hanoi. Prices in this area have increased by about 10-20% compared to the beginning of the year,” said experts from VARS.

In particular, land auctions have seen success in both the number of applications and the amount of money raised. In the first half of this year, there were lots successfully auctioned for a value 10 times higher than the starting price.

With residential real estate, the transaction volume in the city center has slowed down somewhat, after a period of "hot" growth. Currently, investors' money is tending to flow to the centers of neighboring provinces of Hanoi and Ho Chi Minh City.

“Transactions are still mainly from products priced from 3-5 billion VND in the city center and around 2 billion VND in the suburbs. Currently, prices are still stable or tending to increase slightly, about 5-10% compared to the bottom,” the report said.

Hanoi will add 15 new land plots to build social housing

This was the statement of Mr. Duong Duc Tuan, Vice Chairman of Hanoi People's Committee, at the working session with the National Assembly's Supervisory Delegation on real estate market management and social housing development.

According to the target assigned in the Government's project to develop at least 1 million social housing units, by 2025, Hanoi must complete 18,700 apartments.

To speed up the completion of the goal, the City People's Committee has established and approved the investment policy for 4 independent (concentrated) social housing projects with about 1 million square meters of floor space, as a basis for organizing bidding to select investors according to regulations.

In addition, the city also reviewed and added 15 new large-scale land plots to invest in building concentrated social housing projects with synchronous technical and social infrastructure (equivalent to 2,000 apartments/plot). Of which, 2-3 land plots will be focused on building workers' housing in areas near industrial parks.

However, the Vice Chairman of the Hanoi People's Committee also frankly admitted that the planning and allocation of land for social housing construction has not yet met the housing needs of the people. In addition, the implementation of initial projects is still slow. Incentive mechanisms and policies for social housing projects are not really attractive. The procedures for selecting investors for social housing construction investment projects through bidding take a lot of time...

Da Nang has 6 real estate projects that need to be resolved

Mr. Nguyen Duc Hai, Vice Chairman of the National Assembly, and the monitoring delegation recently worked with the Da Nang City government on legal policies on real estate market management and social housing development.

Local authorities said that the city currently has 6 real estate projects facing difficulties related to procedures for approving investment policies and approving investors for commercial housing projects and urban areas where the investors “do not have the right to use residential land”.

According to the Department of Natural Resources and Environment of Da Nang City, the projects facing difficulties are the Hoang Van Thai Plaza complex of Virtuurs Land Joint Stock Company; the housing and commercial service project of Hoa Ky Joint Stock Company.

In addition, there are also the Diamond Square shopping center, office, hotel, and luxury apartments of Kinh Bac - Da Nang Investment Company Limited; the Khue Trung riverside villa area of ​​Truong Dai Phuc private enterprise; the apartment complex and commercial services project - area A2 of Son Tra Beach Investment Joint Stock Company.

Ha Tinh has more than 300 projects behind schedule.

During the 20th session on July 18, the 18th term People's Council of Ha Tinh province continued the question and answer session. Mr. Tran Viet Ha, Director of the provincial Department of Planning and Investment, received many questions from delegates about delayed projects.

At the meeting, Mr. Tran Viet Ha said that in the province, there are currently 240 projects (outside Xuan Thanh tourist area) and 73 projects in Xuan Thanh tourist area that need to be handled. The progress of resolving the backlog projects is still complicated and prolonged.

Sharing about the slow-moving projects, Mr. Ho Huy Thanh, Secretary of the Ky Anh District Party Committee, frankly admitted that every year, the province approves many projects. However, the control and post-inspection after approving the investment policy are not strict, leading to the slow-moving projects.

The Director of the Provincial Department of Planning and Investment acknowledged that the cause of the above backlog of projects is partly the responsibility of the State management agency. Therefore, agencies and units need to continue to urge investors to implement the construction and completion of the project list, not to let the backlog last long.

Vinhomes net profit 9% in Q2/2024

In the second quarter of 2024, Vinhomes Joint Stock Company (VHM) had net revenue of about VND 28,218 billion, down 13% over the same period in 2023.

Of which, real estate transfer activities, the business segment accounting for more than 60% of revenue, only stopped at 17,842 billion VND, 40% lower than the same period last year. The project that is shouldering this business segment is Vinhomes Royal Island.

Vinhomes Royal Island project is positioned in the high-end segment. Photo: VHM

The urban area is located in Thuy Nguyen district, Hai Phong. The project scale is 877 hectares, with a total investment of about 2.4 billion USD. This is a project targeting high-end customers with a series of products in the segment of shophouses, villas, townhouses, etc.

On the other hand, revenue from providing general construction contracting, design consulting and construction supervision services increased sharply from VND1,182 billion to VND7,554 billion in the last quarter.

With the cost of goods sold and services provided increasing only slightly by 2%, at VND19,904 billion, but revenue being significantly lower, the company's gross profit decreased by 57% compared to the same period last year, only falling to about VND8,314 billion.

In the second quarter of 2024, the company recorded a nearly 4-fold increase in financial revenue compared to the same period, reaching VND 8,124 billion. Of which, income from investment and business cooperation contracts increased sharply from VND 139 billion to VND 6,341 billion.

However, the company's financial expenses also increased by 500%, reaching VND2,457 billion. Of which, interest expenses and bond issuance expenses reached VND1,464 billion, more than double compared to the same period last year.

This was expected, as in the first half of this year, Vinhomes successfully issued a batch of bonds with a total value of up to VND 12,500 billion. Thereby, bringing the company's total outstanding bonds by the end of the second quarter of 2024 to VND 27,779 billion.

Finally, Vinhomes' after-tax profit in the last quarter increased by about 9% compared to the same period last year, reaching VND10,608 billion.

In the first 6 months of this year, Vinhomes had a net revenue of VND 36,429 billion, down 70% compared to the same period last year. Profit after tax was VND 11,512 billion, down 88% compared to 2023. Compared to the whole year's business plan, the company has only achieved about 30% of the revenue target and 32% of the profit target.

Phat Dat's profit decreased by 81% due to "difficult real estate market"

“Currently, the general economic situation is still difficult, including the real estate industry. Therefore, our company's investment and development of real estate projects have not been favorable,” explained a representative of Phat Dat Real Estate Development Corporation (PDR) about the net profit of only VND 49 billion in the second quarter of 2024, down 81% compared to the same period last year.

The company's recent financial report also shows that PDR's net revenue was around VND8.2 billion, nearly 4 times higher than the same period last year.

However, the cost of goods sold in the last quarter recorded a sharp increase, from VND715 million in the same period last year to VND6.5 billion. Therefore, PDR's gross profit only stopped at VND1.6 billion, down about 6% compared to the same period last year.

When sales activities do not bring in large revenues, financial activities become the "rescue" business segment for Phat Dat, bringing the company VND 202 billion in the second quarter of 2024. Almost all of the above amount comes from profits from transferring shares of associated companies.

As of June 30, 2024, Phat Dat had total assets of VND 22,536 billion, an increase of about 6% compared to the end of 2023. Owner's equity was VND 11,004 billion, an increase of nearly 13% compared to last year. Liabilities increased slightly by less than 1%, to VND 11,532 billion.

PDR’s inventory is about VND12,523 billion, an increase of more than VND300 billion compared to the beginning of the year and accounting for about 55% of total assets. This includes many projects such as The EverRich 2 (River City), Thuan An 1 and Thuan An 2, Tropicana Ben Thanh, etc.

In the first 6 months of the year, PDR had net revenue of about 170 billion VND, down 12% compared to the same period last year. Profit after tax was 102 billion VND, down 65% compared to the previous year.

D2D lost 6.3 billion VND due to financial revenue and management costs

Industrial Urban Development Joint Stock Company No. 2 (D2D) had revenue in the second quarter of 2024 reaching VND 27 billion, an increase of about 58% over the same period last year. Thereby, bringing the total revenue in the first two quarters of the year to VND 53 billion, an increase of 23% over the same period.

Of which, revenue from leasing industrial park infrastructure is carrying the company, accounting for 68% of revenue, equivalent to 36 billion VND, an increase of about 9% over the same period in 2023.

Despite the sharp increase in revenue, the company's gross profit in the second quarter of 2024 was only VND2.8 billion. Gross profit in the first 6 months of this year also stopped at VND10.8 billion, an increase of VND1.3 billion compared to last year.

The reason for this is that the cost of goods sold in the second quarter of 2024 increased by 50% compared to last year, to VND 24.6 billion. In the first 6 months of the year, the total cost of goods sold reached VND 42 billion, an increase of 27% compared to 2023.

The increase comes from the fact that the cost price of Chau Duc Industrial Park has reached 13 billion VND, an increase of 44% compared to last year. In addition, about 4.4 billion VND in new costs arising from the cost price of the shophouse project in Huu Phuoc residential area is also part of the reason.

Not stopping there, in the past half year, business management costs have also increased from 11 billion VND to 17 billion VND. Notably, the cost of outsourced services has increased sharply from 782 million VND to more than 4 billion VND.

Similarly, production and business costs in the first 6 months of the year also reached VND117 billion, an increase of 134% compared to the previous year. Outsourcing service costs were still the item with the strongest increase, from VND4 billion to VND52 billion.

D2D's financial revenue in the second quarter of 2024 also suddenly dropped sharply to VND619 million, down 9 times compared to the same period last year. The above figure pushed the financial revenue in the first half of the year to only VND1.6 billion, down nearly 10 times compared to the previous year.

Accordingly, the sharp decrease in interest on deposits and loans from 10.1 billion VND to 1.3 billion VND is the reason for the above decrease.

Finally, D2D had a negative profit after tax of VND 6.3 billion in the second quarter of 2024. Thus, after the first 6 months of the year, the company had a net loss of VND 5.4 billion.

Previously, D2D confidently set a business target of VND 369 billion in total revenue and VND 44.5 billion in after-tax profit in 2024. However, with current results, the company has only completed 14% of the revenue target and is still far from the profit target.

Source: https://baodautu.vn/batdongsan/dat-nen-khong-con-sot-gia-vinhomes-lai-rong-9-trong-quy-ii2024-d220428.html