Southern Mekong (VC3) faces the risk of failing to meet its 2023 plan, with short-term debt tripling.

Southern Mekong (VC3) faces a high risk of failing to meet its 2023 business plan.

According to the consolidated Q3 financial statement of Nam Mekong Group (VC3), net revenue from sales and services reached VND 192.9 billion. The majority of this came from real estate business revenue at VND 191.3 billion, while revenue from services accounted for VND 1.6 billion.

The cost of goods sold amounted to VND 132.8 billion, resulting in a gross profit of VND 61 billion. This is equivalent to a gross profit margin of 31.6%.

During the period, financial income decreased by 57% to only 1.4 billion VND. Meanwhile, financial expenses increased 2.4 times compared to the same period, reaching 843 million VND.

Southern Mekong VC3 faces the risk of business plan failure in 2023; short-term debt triples (Figure 1). — Having only completed nearly 12.9% of its 2023 targets after 9 months, Southern Mekong (VC3) faces the risk of failing to meet its annual plan (Photo: Provided).

Selling expenses increased to VND 14.3 billion due to the company's recovery in real estate business operations in the third quarter. Administrative expenses also increased by 8.5%, reaching VND 8.2 billion in the third quarter of 2023.

In summary, Nam Mekong's after-tax profit in the third quarter of 2023 reached VND 31.8 billion, while the after-tax profit attributable to non-controlling shareholders was just over VND 1 million.

Nam Mekong's cumulative revenue for the first nine months of the year reached VND 383.9 billion, and cumulative after-tax profit attributable to parent company shareholders reached VND 56.6 billion. Compared to VC3's targets set at the beginning of the year, which included revenue of VND 1,873 billion and after-tax profit attributable to parent company shareholders of VND 434.8 billion, VC3 has only achieved 20.5% of its revenue target and 12.9% of its profit plan for the year.

Therefore, if VC3 does not achieve any breakthroughs in its business operations in the fourth quarter, it is almost certain that Nam Mekong will fail to meet its 2023 business plan.

Short-term debt increased 3.2 times, and operating cash flow continued to be negative at VND 358.4 billion.

With a relatively high probability of failing to meet its 2023 business plan, VC3 is also facing significant pressure from sharply increasing debt and consistently negative operating cash flow amounting to hundreds of billions of dong.

Specifically, at the end of Q3 2023, VC3's total assets reached VND 3,546.3 billion, a decrease of 4.5% compared to the same period last year. Of this, cash and cash equivalents accounted for VND 134.6 billion, showing little change compared to the beginning of the year.

Accounts receivable surged from VND 491.6 billion to VND 772 billion. Inventory remained at VND 2,378.1 billion, a slight decrease compared to the beginning of the year. Of this inventory, the Bao Ninh 2 Urban Area project still accounts for VND 1,877.5 billion, equivalent to nearly 80% of the total inventory.

At the same time, this inventory also accounts for 52.9% of VC3's total assets. Following that is the inventory at The Charms Binh Duong project with VND 485.2 billion, corresponding to 13.7% of total assets.

Regarding VC3's capital structure, liabilities currently account for VND 2,290.4 billion, equivalent to 64.6% of total assets. Notably, short-term borrowings amount to VND 384.2 billion, 3.2 times higher than at the beginning of the period. Conversely, long-term borrowings decreased from VND 123.5 billion to VND 3.3 billion.

According to the cash flow statement, Nam Mekong's net cash flow from business operations was also negative 358.4 billion VND in Q3 2023. Net cash flow from financing activities increased by 143.9 billion VND, with cash received from borrowings accounting for 279.7 billion VND.

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