How is DIC Corp doing business after the news of canceling the stock issuance?

Recently, the Board of Directors of Construction Development Investment Corporation (DIC Corp, code DIG - HoSE) issued Resolution No. 96/NQ-DIC Group-HĐQT on completing the dossier to not offer additional shares to the public for existing shareholders.

Specifically, the Board of Directors of DIC Corp decided not to continue offering shares to the public according to the Certificate of Registration for Offering No. 231/GCN-UBCK dated December 12, 2024 issued by the State Securities Commission. The reason given was that the remaining time for distributing securities was not enough to implement the offering according to regulations.

According to DIC Corp's previous offering plan, the Company plans to offer shares to existing shareholders at a ratio of 1,000:327.94, equivalent to offering an additional 200 million shares at a price of VND15,000/share, mobilizing VND3,000 billion and expected to be implemented from the second quarter to the fourth quarter of 2024.

Of the mobilized amount of VND 3,000 billion, DIC Corp plans to use VND 1,135 billion to invest in the Cap Saint Jacques Complex Project - Phase II and III, disbursement period from 2024 to 2025; VND 1,426 billion to invest in the Vi Thanh project, disbursement period from 2024 to 2025; the remaining VND 439 billion will be temporarily used to pay for bonds code DIGH2124003, from the fourth quarter of 2024 or the first quarter of 2025.

DIC Corp's consolidated financial report for the fourth quarter of 2024 shows that as of December 31, 2024, the Company's total assets reached more than VND 18,535 billion, an increase of 10% compared to the beginning of the year. The increase mainly came from unfinished production and business costs at the Dai Phuoc Eco-tourism Urban Area and A2 - Vung Tau Center Point apartment projects. Notably, other long-term pending allocation costs increased sharply to more than VND 656 billion, compared to more than VND 3 billion at the beginning of the year. In terms of cash flow, the Company's short-term cash holdings decreased by 33%, to nearly VND 1,700 billion.

On the other side of the balance sheet, liabilities increased by 17% to VND 10,468 billion, of which loans increased by 24% to more than VND 3,800 billion. The positive point is that the amount of money paid by buyers increased by 37% to VND 2,426 billion. The Company's equity at the end of 2024 also increased slightly to nearly VND 8,067 billion, of which the charter capital was nearly VND 6,099 billion.

DIC Corp's financial report also shows that the Company's business activities continue to fail to achieve the targets approved by the General Meeting of Shareholders.

Specifically, DIC Corp recorded consolidated net revenue in the fourth quarter of 2024 of nearly VND 446 billion, up 3% over the same period last year. Of which, revenue from real estate business still accounts for the largest proportion, with nearly VND 292 billion, but decreased by more than 7% over the same period in 2023. This revenue mainly comes from the transfer of apartments in the CSJ Project (Vung Tau) and unfinished houses in the Hau Giang and Hiep Phuoc Projects. In addition, revenue from construction and installation grew strongly, reaching more than VND 93 billion, nearly 2 times higher than the same period last year.

Regarding financial activities, DIC Corp earned more than VND 65 billion, 3.4 times higher than in the fourth quarter of 2023 thanks to no longer having a loss of more than VND 180 billion from investments. However, financial expenses also increased sharply, to more than VND 49 billion, 2.1 times higher than the same period, mainly due to a provision of more than VND 38 billion. The company also recovered nearly VND 13 billion in interest expenses, but did not explain this specifically.

Accumulated for the whole year, DIC Corp recorded more than 1,300 billion VND in net revenue, an increase of 300 billion VND compared to the previous year. Of which, construction and installation activities contributed the most, with nearly 650 billion VND, while real estate revenue only reached 412 billion VND, a sharp decrease compared to 2023.

Thanks to growing revenue sources, DIC Corp reported a net profit of nearly VND89 billion in the fourth quarter of 2024, up 34% year-on-year. However, due to a loss in the first quarter, net profit for the whole year of 2024 was only VND102 billion, down 39% year-on-year.

Compared to the plan at the beginning of the year of 2,300 billion VND in revenue and 760 billion VND in after-tax profit, DIC Corp did not complete the target. This is also the second consecutive year that this enterprise has not achieved its profit plan.

At the 2024 Annual General Meeting of Shareholders, many shareholders expressed concerns about the feasibility of business plans. Previously, General Director Nguyen Quang Tin pledged that key projects such as Dai Phuoc, Lam Ha, Nam Vinh Yen and Vi Thanh would bring in large profits in 2024, while emphasizing the need to speed up legal progress and cut costs to optimize business efficiency.

Recently, on March 16, DIC Corp started construction of a social housing project under the Nam Vinh Yen New Urban Area Project, Phase I. The project is large-scale, with 38 buildings, more than 5,300 apartments, a total floor area of nearly 190,000 m2, a total investment of more than 7,000 billion VND, and is expected to be completed before 2030.

With the cancellation of the stock issuance, while debt pressure has increased significantly in 2024, DIC Corp is facing the problem of cash flow to implement large projects.

Source: https://baodautu.vn/dic-corp-kinh-doanh-ra-sao-truoc-thong-tin-huy-dot-phat-hanh-co-phieu-d258162.html