Novaland returns to profitability.

After two quarters of huge losses, Novaland reported a profit of nearly 140 billion VND in the third quarter, although it was still 42% lower than the same period last year.

According to the newly released consolidated financial report, Novaland Group (NVL) recorded approximately VND 136.7 billion in after-tax profit. This marks the first quarter the company has returned to profitability after two quarters of losses, resulting in a half-year loss of VND 1,094 billion. However, compared to the third quarter of 2022, this profit level is still 42% lower.

The management explained that due to the overall difficulties in the real estate market, revenue decreased by 67% compared to the same period last year, to 1,073 billion VND. However, considering the whole year, this is the quarter with the highest revenue.

Previously, Novaland released its business plan for the last six months of the year, aiming for profitability from the third quarter. However, the expected profit was 310 billion VND, more than double the actual figure.

For the first nine months of the year, Novaland's consolidated revenue reached over VND 2,730 billion, while recording a loss of VND 958 billion. In contrast, during the same period last year, the company had approximately VND 7,900 billion in revenue and a positive profit of over VND 2,050 billion. NVL has only achieved 29% of its revenue target and is still quite far from its profit target of VND 214 billion this year.

Since the beginning of the year, Novaland has recorded revenue from the handover of projects such as NovaWorld Phan Thiet (Binh Thuan), NovaWorld Ho Tram (Ba Ria - Vung Tau), Aqua City ( Dong Nai ), Palm City, Saigon Royal (Ho Chi Minh City) and other central real estate properties.

At Aqua City, after the Government Task Force resolved the issues, the project restarted at the end of June and was allowed to sell some houses from the beginning of August. NovaWorld Ho Tram is being directed to expedite legal procedures. NovaWorld Phan Thiet has completed the adjustment of the 1/500 detailed planning for all items and the investment policy remains unchanged, moving towards paying land lease fees in a lump sum instead of annually.

A completed section of the NovaWorld Phan Thiet project (Binh Thuan). Photo: NVL — A completed section of the NovaWorld Phan Thiet project (Binh Thuan). Photo: *NVL*

Over the past period, this company has focused on debt restructuring. By the end of the third quarter, NVL's total liabilities decreased slightly by 3.5% to over 205,460 billion VND. Financial debt alone fell by nearly 10%, to over 58,900 billion VND. In the third quarter, the group generated 2,230 billion VND in financial revenue, mainly from the sale of assets to restructure debt.

Novaland is also accelerating negotiations to extend bond maturities. In September alone, the company and its subsidiary postponed the maturity dates for three tranches of bonds totaling approximately VND 1,145 billion. NVL also plans to repurchase over VND 2,300 billion worth of bonds ahead of schedule, equivalent to more than 40% of the outstanding balance of two tranches issued in mid-2022.

The Q3 financial report also showed that the company had real estate inventory of nearly VND 137,600 billion. Of this, the value of land and projects under construction accounted for nearly 93%. The remainder consisted of completed real estate and real estate goods, including completed properties awaiting handover to customers. Meanwhile, advance payments from buyers – an amount reflecting the potential for revenue and profit growth of real estate businesses – increased by 11% to nearly VND 17,800 billion.

On the stock market, NVL shares have been trading around 13,500 VND per share for about a week, a drop of more than 60% from their peak this year. This stock was previously placed on the warning list by the Ho Chi Minh City Stock Exchange (HoSE) in mid-April due to the late submission of audited financial statements for 2022. Recently, Novaland proposed removing NVL shares from the warning list after rectifying the information disclosure issues. The company also did not commit any violations of regulations for six consecutive months since the HoSE issued the warning.

Tat Dat

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