Novaland returns to profit

After two quarters of huge losses, Novaland reported a profit of nearly VND140 billion 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 about VND 136.7 billion in profit after tax. This is the first quarter that the company has made a profit again after two first quarters of the year with a loss with a negative semi-annual profit of VND 1,094 billion. However, compared to the third quarter of 2022, this profit is still 42% lower.

The management explained that due to the general difficulties of the real estate market, revenue decreased by 67% compared to the same period last year, to VND1,073 billion. However, if we consider this year, this is the quarter with the highest revenue.

Previously, Novaland released a business plan for the last 6 months of the year with the goal of making a profit from the third quarter. However, the expected profit was 310 billion VND, more than double the actual figure.

In the first 9 months of the year, Novaland's total consolidated revenue reached over VND2,730 billion and recorded a loss of VND958 billion. Meanwhile, in the same period, this enterprise had about VND7,900 billion in revenue and a positive profit of over VND2,050 billion. NVL has only completed 29% of its revenue target and is still far from its profit target of VND214 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 (HCMC) and other central real estate.

At Aqua City, after the Government Task Force cleared the obstacles, 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 speed up legal procedures. NovaWorld Phan Thiet completed the adjustment of the detailed 1/500 planning for all items and kept the investment policy, moving towards paying land rent once instead of paying annually.

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

Recently, this enterprise has focused on debt restructuring. By the end of the third quarter, NVL's total debt decreased slightly by 3.5% to more than VND205,460 billion. Financial debt alone decreased by nearly 10% to more than VND58,900 billion. In the third quarter, this group had VND2,230 billion in financial revenue, mainly from selling assets to restructure debt.

Novaland also accelerated the bond extension agreement. In September alone, this enterprise and its subsidiary extended the maturity of three bond lots with a total value of about VND1,145 billion. NVL also plans to buy back more than VND2,300 billion of bonds before maturity, equivalent to more than 40% of the outstanding volume of two bond lots issued in mid-2022.

The third quarter financial report also shows that this enterprise has a real estate inventory of nearly 137,600 billion VND. Of which, the value of land funds and projects under construction accounts for nearly 93%. The rest is completed real estate and real estate goods, completed real estate waiting to be handed over to customers. Meanwhile, prepayments from buyers - an amount reflecting the potential growth in revenue and profit of real estate enterprises, increased by 11% to nearly 17,800 billion VND.

On the stock market, NVL shares have been trading around VND13,500 per share for about a week, down more than 60% from this year's peak. This code was put on the warning list by the Ho Chi Minh City Stock Exchange (HoSE) in mid-April for late submission of audited financial statements for 2022. Recently, Novaland proposed to remove NVL shares from the warning list because it has corrected information disclosure. The company has also not committed any violations of regulations for 6 consecutive months since the warning date of HoSE.

Siddhartha

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