IPA investment returns 104.85 billion VND in profit in the first quarter of 2024

IPA investments returned a profit of VND 104.85 billion in the first quarter of 2024.

Reducing financial costs and increasing profits from joint ventures and associated companies helped IPA Investment Group Joint Stock Company (IPA - HNX exchange) record profits again in the first quarter of 2024.

In the first quarter of 2024, IPA Investment recorded revenue of VND 85.55 billion, a 34.1% increase compared to the same period last year. Net profit after tax reached VND 104.85 billion, compared to a loss of VND 136.15 billion in the same period last year, representing an increase of VND 241 billion. However, the gross profit margin decreased sharply from 43.7% to 31.6%.

During the period, gross profit decreased by 3.1%, equivalent to a decrease of VND 0.86 billion, to VND 27.01 billion; financial revenue decreased by 38.2%, equivalent to a decrease of VND 30.36 billion, to VND 49.14 billion; financial expenses decreased by 71%, equivalent to a decrease of VND 193.47 billion, to VND 130.92 billion; profit from joint ventures and associated companies increased by 198%, equivalent to an increase of VND 86.99 billion, to VND 130.92 billion; selling and administrative expenses increased by 5.7%, equivalent to an increase of VND 0.92 billion, to VND 17.12 billion; and other activities showed insignificant changes.

Thus, in the first quarter of 2024, although gross profit decreased, after-tax profit increased sharply, shifting from a loss to a profit. This was mainly due to reduced financial costs and increased profits from joint ventures and associated companies.

IPA's financing costs decreased sharply in Q1 2024 (Source: IPA)

IPA's financing costs decreased sharply in the first quarter of 2024. (Source: IPA)

IPA Investment further explained that the reduction in financial costs was mainly due to last year's provision for securities devaluation and investment losses of VND 163.3 billion, but this year's reversal of VND 19.2 billion, a reduction of VND 182.5 billion.

New investment of VND 850 billion in Trung Nam Renewable Energy Joint Stock Company.

As of March 31, 2024, IPA Investment's total assets increased slightly by 0.8% compared to the beginning of the year, equivalent to an increase of VND 71.6 billion, reaching VND 8,907.7 billion. Of this, long-term financial investments accounted for VND 5,925.8 billion, representing 66.5% of total assets; short-term receivables accounted for VND 1,300.1 billion, representing 14.6% of total assets…

During the period, assets fluctuated significantly, mainly due to long-term financial investments increasing by 20.3% compared to the beginning of the year, equivalent to an increase of VND 998.1 billion, reaching VND 5,925.8 billion; short-term receivables decreased by 45.7% compared to the beginning of the year, equivalent to a decrease of VND 1,094.8 billion, to VND 1,300.1 billion…

Regarding investments in joint ventures and associated companies, as of March 31, 2024, IPA Investment reported an investment of VND 4,295.1 billion in VNDirect Securities Joint Stock Company (VND - HoSE), representing a 25.84% stake in its charter capital. For investments in other entities, IPA Investment recorded an investment of VND 850 billion in Trung Nam Renewable Energy Joint Stock Company (9.36% of charter capital) for the first time, and is currently investing VND 928.4 billion in Century Real Estate Joint Stock Company (CRE - HoSE), representing a 10.91% stake. A provision of VND 474 billion has been set aside for CRE shares, representing a temporary loss of 51.1% of the total investment value.

IPA continues to make provisions for investment in CRE shares as of March 31, 2024 (Source: IPA)

IPA continues to make provisions for its investment in CRE shares as of March 31, 2024. (Source: IPA)

Reportedly, at the 2023 Annual General Meeting of Shareholders, the leaders of IPA Investment Group explained that the investment in CenLand was to begin learning and gaining experience in the real estate services sector.

These include projects where IPA Investment Group has made direct investments, indirect investments, and financial investments, but the Group has always participated in and collaborated with CenLand to find the "formula for success," rather than simply engaging in financial investment deals.

Regarding the issue of many of the Group's investments being incurring losses, IPA Investment Group also affirmed that the losses are mainly due to stalled investment activities, with all investments currently in a pending state. This is because in 2022, many projects were halted due to legal issues, and the company is accelerating the process of consolidating legal documents and paperwork to complete them.

Regarding funding, as of the end of Q1/2024, IPA Investment's total short-term and long-term debt decreased by 9.4% compared to the beginning of the year, equivalent to a reduction of VND 411 billion, to VND 3,981.5 billion, which is equal to 95.1% of equity (equity is VND 4,187.2 billion).

Chairman Vu Hien's company has divested all of its more than 3.2 million IPA shares.

In addition, another noteworthy point is that IPA Securities Investment Fund Management Company Limited recently sold all 3,209,280 IPA shares, reducing its ownership from 1.5% to 0% of the charter capital. The transaction took place from December 26, 2023 to January 16, 2024.

It is known that IPA Securities Investment Fund Management Company Limited is an organization related to Mr. Vu Hien, Chairman of the Board of Directors at IPA Investment Group.

Furthermore, as of March 31, 2024, IPA Investment had only two major shareholders: H&H Investment Management Co., Ltd., owning 55.45% of the charter capital; and Ms. Luong Thu Hang, owning 5.25% of the charter capital; the remaining 39.3% of the charter capital belonged to minority shareholders owning less than 5% of the charter capital.

Source