Hodeco (HDC) profit decreased by 96%, mobilized 300 billion from shareholders to pay debt

Hodeco raises 300 billion VND from existing shareholders.

Ba Ria - Vung Tau Housing Development Joint Stock Company - Hodeco (HDC) has successfully offered nearly 20 million shares, increasing its charter capital from VND 1,351 billion to VND 1,550.95 billion.

The share offering was completed on June 19, 2024, with a total of 19,990,244 shares offered. This represents a 99.95% sale rate of the total registered issuance of 20 million shares.

Hodeco (HDC) sees profits plummet by 96%, raises 300 billion VND from shareholders to repay debt (Photo: Provided)

As a result, Hodeco raised 299.85 billion VND. The remaining 9,756 shares will be canceled due to the inability to issue them.

Regarding the shareholder structure, after the issuance, the major shareholder is Mr. Doan Huu Thuan, Chairman of the Board of Directors, who owns 9.85% of the charter capital. The remaining shares are owned by smaller shareholders, each holding less than 5% of the charter capital. The nearly 300 billion VND raised from the issuance will be used entirely by Hodeco to repay debts to four major banks.

Profits plummeted by over 96%.

Hodeco's fundraising round comes amidst poor business performance. Specifically, revenue in Q1 2024 reached VND 85.3 billion, a decrease of half compared to the same period last year.

Gross profit reached VND 14.7 billion, a decrease of 81.4% compared to the same period last year. Consequently, the gross profit margin also decreased from 44.8% to only 17.2%.

Conversely, financial revenue surged to VND 11.9 billion, while financial expenses decreased by 58.5% to VND 8.9 billion. Selling expenses and administrative expenses were reduced only slightly, to VND 11.8 billion.

The net profit after tax was only 1.1 billion VND, a decrease of 96.4% compared to the same period last year. Notably, Hodeco only recently escaped losses thanks to financial activities. In its core business operations, the company is currently experiencing a loss of over 6 billion VND, compared to a profit of 43.5 billion VND in the same period last year.

As of the end of Q1/2024, Hodeco's total capital was recorded at VND 4,753 billion. Of this, liabilities accounted for VND 2,844 billion, mostly short-term debt. Equity only accounted for approximately VND 1,909 billion, equivalent to 40% of total capital.

Source: https://www.congluan.vn/hodeco-hdc-lai-giam-96-huy-dong-300-ty-tu-co-dong-de-tra-no-post300223.html