Novaland earns trillions of dong from asset sales

Novaland Investment Group (NVL) has just announced its Q3 business results with consolidated revenue of nearly VND 1,074 billion, a decrease of 67% compared to the same period last year. Net profit after tax decreased by 42% to VND 137 billion, breaking the streak of losses in the previous two quarters.

For the first nine months of the year, consolidated revenue reached VND 2,740 billion, while a loss of VND 958 billion was recorded. Revenue mainly came from sales, totaling nearly VND 2,292 billion, generated from handovers at projects such as NovaWorld Phan Thiet, NovaWorld Ho Tram, Aqua City, Palm City, Saigon Royal, and other central real estate projects. Revenue from service provision reached VND 449 billion.

This real estate giant recorded inventory value exceeding VND 137,594 billion. The majority of this comes from the value of land and projects under construction, accounting for over 92% (equivalent to nearly VND 126,818 billion); the remainder consists of completed properties and finished goods awaiting handover to customers.

Notably, in its Q3 2023 financial report, Novaland also recorded VND 2,230 billion in financial revenue, mainly from the sale of assets to restructure debt. This significant financial gain primarily came from the divestment of its stake in Thanh Nhon Real Estate Investment Company Limited (nearly VND 1,179 billion); the remainder was interest from investment cooperation contracts, interest on deposits/loans, and other activities.

Novaland stated that the restructuring process has been resolved by regulatory authorities, removing legal obstacles. In August 2023, the Department of Construction of Dong Nai province issued a document allowing the sale of future-built properties, specifically low-rise houses in subdivisions I and V of the Aqua City project, and permitting the continued investment, construction, and sales of items in accordance with the approved detailed planning.

The NovaWorld Ho Tram project ( Ba Ria - Vung Tau ) is also receiving strong direction from the Provincial People's Committee to expedite legal procedures. The NovaWorld Phan Thiet project (Binh Thuan) has completed the adjustment of the 1/500 detailed planning for all project components and adjusted the payment method from annual land lease payments to a one-time payment.

Projects in the central area of Ho Chi Minh City have also been receiving attention and positive signals in resolving legal and investment procedure obstacles.

As of the end of September, this major real estate company in the South recorded total assets of over 249,000 billion VND, a slight decrease of 3% compared to the beginning of the year. The majority of this consists of inventory value of nearly 138,000 billion VND and short-term receivables of nearly 56,500 billion VND.

On the other side of the balance sheet, total liabilities decreased by 9% year-on-year to around 205,000 billion VND, including financial borrowings of nearly 59,000 billion VND.

The company currently has a registered capital of over 19,500 billion VND and undistributed profits of nearly 12,900 billion VND.

Trillions deposited in banks help tycoons narrowly avoid losses. Many tycoons in real estate, industrial parks, insurance, fertilizers, etc., are heavily reliant on interest from bank deposits to salvage their financial indicators and prevent them from looking too bad.

Source