Profits fall, real estate businesses complain of difficulties

The business results in the first half of 2024 of many real estate businesses are not very positive, with revenue and profit still on the decline.

The report of Ha Do Group Joint Stock Company - an investor specializing in real estate, hotels, and offices, shows a less than bright financial picture.

Specifically, in the second quarter of 2024, the sales and service provision segment brought Ha Do over 158 billion VND; of which, the cost of goods sold accounted for 87.7 billion VND, the remaining 70.4 billion VND was gross profit from sales and service provision. Profit from business activities reached over 90 billion VND. After deducting corporate income tax, Ha Do's profit was only 82.8 billion VND. Meanwhile, this figure in the same period in 2023 was over 147.3 billion VND.

In the first 6 months of 2024, Ha Do Group achieved a profit of more than 175.3 billion VND. Looking back at the same period in 2023, Ha Do achieved a profit of nearly 247 billion VND after deducting corporate income tax. Thus, Ha Do's profit stream in the first 6 months of 2024 decreased by 72 billion VND compared to the same period. It is worth noting that while profits decreased, debts tended to increase.

The report shows that as of January 1, 2024, the company's debt was over VND2,800 billion. But in just 6 months (until June 30, 2024), this figure has exceeded VND3,000 billion. Of which, short-term debt is over VND2,400 billion, accounting for 80% of the debt.

Ha Do's short-term revenue includes many customers who are member enterprises of this group such as: Ha Do Real Estate Management and Operation Joint Stock Company, Ha Do Real Estate Management and Trading Company, Binh An Riverside Real Estate Investment Company, Ha Do Thuan Nam Wind Power, Agrita Quang Nam Energy Joint Stock Company, Minh Long Saigon, Za Hung Company, Song Tranh 4 Hydropower Plant... However, this revenue is only at nearly 258 billion VND.

Similarly, Binh Duong Construction and Transport Joint Stock Company recorded revenue in the second quarter of 2024 of VND 16.56 billion, down 41.2% year-on-year. Profit after tax recorded a loss of VND 11.61 billion (same period, loss of VND 1.65 billion).

Explaining the above results, Binh Duong Construction and Transport Company said that the revenue decrease was mainly due to a shortfall in the real estate sector when no revenue was recorded.

Also having a decline in business results in the second quarter of 2024, Phat Dat Corporation said that the company's after-tax profit was quite modest, only 50 billion VND, down 82% compared to the profit of 275 billion VND in the same period last year. Mr. Bui Quang Anh Vu, General Director of Phat Dat Corporation explained that the general economic situation is still difficult, including the real estate sector. Investment and development of real estate projects of Phat Dat Corporation has not been favorable.

Or like Quoc Cuong Gia Lai Joint Stock Company, according to the newly released financial prospectus, in the second quarter of 2024, Quoc Cuong Gia Lai achieved revenue of nearly 26.5 billion VND, down more than 40% compared to the same period. Revenue decreased, but cost of goods sold was not reduced, so Quoc Cuong Gia Lai recorded a loss after tax of 17.3 billion VND. This is the highest loss of this enterprise since 2012.

Explaining the reason for the heavy loss, Mr. Nguyen Quoc Cuong, General Director of Quoc Cuong Gia Lai, who was recently appointed to run the Company, explained that the real estate market in general is still facing many difficulties. In addition, the electricity output is still low, and rubber has just been put into exploitation, so the company's revenue has decreased sharply. Compared to the beginning of the year, Quoc Cuong Gia Lai's inventory is still high, at more than VND 7,028 billion. Of which, more than VND 6,500 billion is recorded in unfinished real estate projects.

Commenting on the market movements, Mr. Nguyen Quoc Anh, Deputy General Director of Batdongsan.com.vn, said that the reversal point of the real estate market will take place from the second quarter to the fourth quarter of 2024, when negative signs gradually subside and the level of interest in real estate types stops falling sharply.

However, the reversal is only happening in the Northern region, especially Hanoi, when apartment and real estate transactions are very good, while the transaction volume in the Southern region, with Ho Chi Minh City as the leader, is not really stable. The reason is that the cash flow of Northern investors has left the Ho Chi Minh City market since mid-2020. In addition, a large amount of cash flow is still stuck in bonds issued by investors in the Southern region. In addition, the Southern market is legally blocked, causing many projects to not yet be implemented.

Source: https://baodautu.vn/batdongsan/loi-nhuan-sut-giam-doanh-nghiep-dia-oc-than-kho-d222287.html