Nam Long's profit decreased by nearly a thousand billion, negative cash flow, project delayed

Some projects delay business time

Based on the progress of NLG's projects and business plans, BVSC Securities has adjusted the revenue and profit forecast of Nam Long Investment Corporation (code NLG) in 2023. Specifically, the adjusted revenue is 4,635 billion. Profit after tax belonging to the parent company's shareholders is 768 billion, down from the 970 billion forecast in early 2023.

Specifically, BVSC adjusted (1) the handover plan of the low-rise Mizuki from 2023 to 2024; (2) the number of additional products expected to be sold in the fourth quarter of 2022 by Izumi did not perform as planned, so it could not be recorded in 2023; and (3) adjusted the increase in sales and business management expenses due to high business recording data.

In the report in early 2023, BVSC adjusted the progress of large-scale projects and locations in non-central areas of Nam Long such as Southgate, Izumi, Paragon... However, at the General Meeting of Shareholders, Nam Long's board of directors shared the policy of focusing on trading products that meet real needs (Flora, Ehomes...) and commercial floors in 2023.

Projects with large values ​​will delay their business plans. Therefore, some projects that were previously expected to be operational in the fourth quarter of 2023, such as Paragon and Izumi (under GD1), will likely be postponed to 2024.

According to BVSC, the main risk for Nam Long currently comes from customer purchasing power. This securities company believes that customer purchasing power is affected by a number of factors: (1) recession in industries related to production, consumption, import and export; (2) capital flow congestion in the bond market; and (3) real estate lending interest rates are still generally high at 12-13%. These factors will not improve in the short term but are forecasted to improve in early 2024.

Heavy cash flow

According to the first quarter financial report, Nam Long recorded revenue of VND235 billion, down 60% compared to the same period. Gross profit reached VND159 billion, also down 36% compared to the same period. The reason is that the cost of real estate is low at 4%.

After deducting expenses, the after-tax profit attributable to shareholders of parent company Nam Long reached 6.8 billion VND, many times higher than the same period last year. Despite the profit, the net cash flow from business activities was negative more than 752 billion VND while in the same period last year it was negative more than 93 billion VND.

As of March 31, 2023, Nam Long's total assets reached VND27,264 billion, an increase of VND180 billion compared to the beginning of the year. Of which, inventories increased by VND781 billion, to VND15,611 billion, accounting for 57%. Short-term receivables decreased by 8% to VND3,276 billion while cash and cash equivalents decreased by VND350 billion compared to the beginning of the year to VND3,426 billion.

In terms of capital, Nam Long's liabilities at the end of the first quarter reached VND14,209 billion, an increase of VND440 billion compared to the beginning of the year. Notably, loans increased by 8% to VND5,604 billion and short-term prepayments from buyers increased by VND345 billion to VND3,616 billion.

Source: https://www.congluan.vn/bvsc-du-doan-lai-nam-long-giam-gan-nghin-ty-trong-boi-canh-am-nang-dong-tien-du-an-lui-thoi-gian-kinh-doanh-post250398.html