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

Recently, the Board of Directors of the Development Investment Construction Corporation (DIC Corp, ticker DIG - HoSE) issued Resolution No. 96/NQ-DIC Group-HĐQT regarding the completion of the documentation to not conduct an additional public offering of shares to existing shareholders.

Specifically, the Board of Directors of DIC Corp decided not to proceed with the public offering of shares as per Registration Certificate No. 231/GCN-UBCK dated December 12, 2024, issued by the State Securities Commission. The reason given is that the remaining time for distributing securities is insufficient to carry out the offering as required by 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 3,000 billion VND raised, DIC Corp plans to use 1,135 billion VND to invest in the Cap Saint Jacques Complex Project - phases II and III, with disbursement from 2024 to 2025; 1,426 billion VND to invest in the Vi Thanh project, with disbursement from 2024 to 2025; and the remaining 439 billion VND will be temporarily used to repay bonds code DIGHT2124003, from Q4/2024 or Q1/2025.

According to DIC Corp's consolidated financial report for the fourth quarter of 2024, as of December 31, 2024, the company's total assets reached over VND 18,535 billion, a 10% increase compared to the beginning of the year. This increase was mainly driven by work-in-progress production and business costs at the Dai Phuoc Eco-tourism Urban Area and A2 - Vung Tau Center Point apartment projects. Notably, other long-term deferred expenses surged to over VND 656 billion, compared to over VND 3 billion at the beginning of the year. Regarding 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 borrowings increased by 24% to over VND 3,800 billion. A positive point is that customer prepayments increased by 37%, reaching VND 2,426 billion. The company's equity at the end of 2024 also increased slightly to nearly VND 8,067 billion, of which charter capital was nearly VND 6,099 billion.

DIC Corp's financial report also shows that the company's business operations continue to fall short of the targets approved by the General Shareholders' Meeting.

Specifically, DIC Corp recorded consolidated net revenue of nearly VND 446 billion in the fourth quarter of 2024, a 3% increase compared to the same period last year. Of this, revenue from real estate business still accounted for the largest share, at nearly VND 292 billion, but decreased by more than 7% compared to the same period in 2023. This revenue mainly came 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 grew strongly, reaching over VND 93 billion, nearly double that of the same period last year.

In terms of financial performance, DIC Corp earned over 65 billion VND, 3.4 times more than in Q4/2023, thanks to eliminating the loss of over 180 billion VND from investments. However, financial expenses also increased sharply, to over 49 billion VND, 2.1 times higher than the same period, mainly due to provisions of over 38 billion VND. The company also received a reversal of nearly 13 billion VND in interest expenses, but no specific explanation was provided for this amount.

For the full year, DIC Corp recorded over VND 1,300 billion in net revenue, an increase of VND 300 billion compared to the previous year. Construction activities contributed the most, with nearly VND 650 billion, while real estate revenue only reached VND 412 billion, a sharp decrease compared to 2023.

Thanks to increased revenue, DIC Corp reported a net profit of nearly VND 89 billion in Q4 2024, a 34% increase compared to the same period last year. However, due to a loss recorded in Q1, the net profit for the whole year 2024 only reached VND 102 billion, a 39% decrease compared to the previous year.

Compared to the initial plan of 2,300 billion VND in revenue and 760 billion VND in after-tax profit, DIC Corp failed to meet its targets. This also marks the second consecutive year that the company has failed to achieve its profit goals.

At the 2024 Annual General Meeting of Shareholders, many shareholders expressed concerns about the feasibility of the business plans. Previously, General Director Nguyen Quang Tin committed that key projects such as Dai Phuoc, Lam Ha, Nam Vinh Yen, and Vi Thanh would generate significant profits in 2024, while emphasizing the need to expedite legal procedures and reduce costs to optimize business efficiency.

Recently, on March 16th, DIC Corp commenced construction of social housing projects within the Nam Vinh Yen New Urban Area Project, Phase I. This large-scale project comprises 38 buildings, over 5,300 apartments, a total floor area of nearly 190,000 m2, and a total investment of over 7,000 billion VND, with completion expected before 2030.

With the cancellation of the share issuance, and with debt pressure increasing significantly in 2024, DIC Corp is facing cash flow challenges in implementing major projects.

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