The Long Hau Industrial Park real estate developer no longer generated revenue from land leases in the third quarter, whereas in the same period last year it still earned over 100 billion VND. Revenue mainly came from leasing factory buildings, accommodation facilities, commercial centers, and other activities.
This situation caused Long Hau's revenue to plummet by 62% in the most recent business quarter. Consequently, pre-tax profit also decreased by 59% to below 42 billion VND.
Notably, this profit was significantly contributed by financial revenue (entirely interest on bank deposits) of over 24 billion VND, a 74% increase compared to the same period last year and accounting for more than half of the profit. The company benefited from the high interest rate environment while maintaining a bank deposit balance of nearly 1,100 billion VND.
Overall, in the first nine months of the year, this industrial park company recorded a 50% decrease in revenue to below 250 billion VND (due to almost no land lease revenue in the second and third quarters). Pre-tax profit decreased by 38% to 133 billion VND, with a significant contribution from bank interest expenses of over 57 billion VND.
The fertilizer giant Ca Mau Fertilizer Company is even more heavily reliant on interest income from bank deposits. The fertilizer company had a negative business quarter with revenue down 9% and profits plummeting 87%, to 3,150 billion VND and 105 billion VND respectively, the lowest levels in 11 quarters.
In fact, Ca Mau Fertilizer Company could have even incurred losses if it weren't for a sudden surge in financial revenue of 150% year-on-year to 200 billion VND (including over 150 billion VND in interest on deposits and the remainder from exchange rate differences).
The company acknowledged favorable financial revenue as one of its bright spots, alongside increased sales volume. However, the sharp drop in fertilizer prices and a significant increase in selling expenses have made the results less favorable.
Ca Mau Fertilizer Company continues to maintain a balance of nearly 9,800 billion VND in bank deposits, which is a major contributor to its business performance. The company's pre-tax profit for the first nine months of the year reached 714 billion VND, of which 400 billion VND was interest earned from bank deposits.
CRV Real Estate – a real estate company belonging to Mr. Do Huu Ha's Hoang Huy Group ecosystem – is similarly relying on interest income from banks. The company recorded a 16% increase in financial operating profit to over 92 billion VND (entirely interest from deposits/loans).
This figure is significant because it contributed the largest share to CRV Real Estate's pre-tax profit of VND 108 billion during the period of July 1st to September 30th, 2023, equivalent to a contribution rate of up to 85% to the profit.
In fact, the main contribution in the past few quarters has still come from interest income from deposits/loans, and conversely, there have been no financial expenses incurred. The company currently has a bank deposit balance of VND 4,576 billion, earning interest rates ranging from 3.4-11% per year.
| Target (billion VND) | Interest on deposits/loans (III/2023) | Interest on deposits/loans (III/2022) | Profit before tax (III/2023) | Profit before tax (February 2022) | ||||
|---|---|---|---|---|---|---|---|---|
| FPT Telecom | 263 | 198 | 785 | 723 | ||||
| Duc Giang Chemicals | 169 | 82 | 863 | 1,596 | ||||
| Ca Mau Fertilizer | 150 | 67 | 105 | 786 | ||||
| Vefac | 150 | 136 | 145 | 102 | ||||
| CRV Real Estate | 92 | 79 | 108 | 87 | ||||
| Duoc Hau Giang | 54 | 32 | 187 | 290 | ||||
| Agribank Insurance | 46 | 33 | 71 | 86 | ||||
| Long Hau | 24 | 14 | 42 | 102 |
Vietnam Exhibition and Fair Center Joint Stock Company (Vefac) - a subsidiary of Vingroup - is facing significant difficulties in its core operations, with its revenue still primarily relying on idle funds invested in bonds and loans to partners.
According to its Q3 report, Vefac recorded interest income from deposits, bonds, and loans exceeding VND 150 billion, a 10% increase compared to the same period last year. Currently, the company mainly invests VND 1,657 billion in bonds to earn an interest rate of 8.5% per year and lends VND 3,391 billion to other businesses at an interest rate of 12% per year.
Several other businesses are also showing that profits from interest on deposits/loans contribute significantly to their overall business results, such as FPT Telecom, Agribank Insurance, Hau Giang Pharmaceutical, and Duc Giang Chemicals...
According to data from the State Bank of Vietnam, the total amount of savings deposited in banks as of August reached over 12.4 million billion VND. Of this, deposits from individuals increased by 9.68% to approximately 6.43 million billion VND, and deposits from businesses increased by 1% to over 6.01 million billion VND.
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