A real estate giant rents out space in Ho Chi Minh City and earns nearly 1 billion VND/month.

Industrial real estate giant for office rental

Recently, the Board of Directors of IDICO Corporation - JSC (stock code: IDC) issued a Resolution on approving the Contract between IDICO and SSG Group Joint Stock Company.

Accordingly, this Corporation will lease to SSG 1,057 square meters of the 32nd floor of Pearl Plaza building, 561A Dien Bien Phu, Ward 25, Binh Thanh District, Ho Chi Minh City. The purpose of the contract is to lease the premises for office use.

The rental fee is nearly 755 million VND/month and the service fee is nearly 189 million VND/month. Thus, the total amount that SSG Group has to pay to IDICO is more than 943 million VND/month. The rental term is 36 months.

SSG Group Joint Stock Company is the largest shareholder of IDICO with 22.5% of share capital, as of September 28.

This group was established on October 24, 2003 with 24 member companies, operating mainly in 2 fields: Real estate investment and business andEducation development investment.

Một ông lớn địa ốc cho thuê mặt bằng tại TPHCM kiếm gần 1 tỷ đồng/tháng - 1 — IDICO Corporation leased more than 1,000 square meters at Pearl Plaza to SSG Group for a total of VND943 million/month (Photo: IT).

SSG is also the investor and developer of the Pearl Plaza project. On December 26, 2008, the Ho Chi Minh City People's Committee granted the Investment Certificate for the project. In addition, this group also develops a number of other projects such as the Saigon Pearl Project - High-end residential complex, the Saigon Pearl Villas Project, Saigon Airport Plaza, and the My Dinh Pearl golf course.

In the education sector, SSG is the investor of two international schools, Wellspring Hanoi and Wellspring Saigon.

Third quarter profits fall sharply

At the end of October, IDICO announced a negative business results report when net revenue in the third quarter reached nearly 1,444 billion VND, down 30% compared to the same period last year. Profit after tax was over 194 billion VND, down 68.3% compared to the same period in 2022.

In the first 9 months, the corporation's accumulated revenue reached nearly VND4,998 billion, down nearly 29%. After-tax profit was recorded at over VND1,032 billion, down 56.3% compared to the previous year.

The company explained that the revenue decrease was due to the fact that the industrial park infrastructure lease contracts had not yet met the conditions for one-time revenue recognition as prescribed, causing the profit to decrease. In addition, part of the reason was that IDICO's interest expense increased by 64% compared to the same period to nearly VND43 billion.

A bright spot in this company's business performance is that unrealized revenue remains high.

As of September 30, unrealized revenue was VND5,372 billion, including VND212 billion of short-term unrealized revenue and nearly VND5,160 billion of long-term unrealized revenue. The largest proportion was unrealized revenue at Phu My 2 and Phu My expansion industrial parks with VND2,960 billion, Que Vo 2 Industrial Park with nearly VND741 billion, and My Xuan B1 Industrial Park with nearly VND640 billion.

IDICO is one of the largest industrial park developers in Vietnam, with 727 hectares of leased land in Long An, Ba Ria Vung Tau and Thai Binh provinces. SSI Securities Company said that low compensation costs for site clearance will help the company maintain gross profit margins for industrial parks at over 50% from 2022 to 2026.

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