Novaland continues to lose money despite soaring revenue

Despite the improvement in sales revenue, up 81% year-on-year, Novaland still lost VND666 billion in the second quarter of 2025 while debt pressure and maturity in the next 12 months are posing challenges for this real estate business.

Novaland still manages to restructure debt and resolve legal issues of the project - Photo: NGOC HIEN

On July 29, No Va Real Estate Investment Group Joint Stock Company (Novaland, stock code: NVL) announced its business results for the second quarter of 2025.

Revenue up but profit still negative

In the first 6 months of 2025, Novaland recorded a total consolidated revenue of VND 3,715 billion from sales and service provision. Notably, net revenue from sales reached nearly VND 3,423 billion, up 81% over the same period last year, net revenue from service provision reached VND 291 billion.

However, despite strong revenue growth, Novaland's consolidated after-tax profit recorded a loss of VND666 billion. According to Novaland's explanation, the main reason came from exchange rate differences and other activities.

This shows that, although core business activities have improved, financial factors are still a major burden, directly affecting Novaland's net profit.

As of June 30, Novaland's total assets reached over VND238,619 billion. Of which, inventories recorded a large proportion of VND150,533 billion, with 94.8% being the value of land funds and projects under construction, the rest being completed real estate awaiting handover.

The biggest challenge for Novaland is still the total outstanding debt of more than 61,000 billion VND. In particular, the total debt due in the next 12 months is about 32,000 billion VND.

With cash flow still facing many difficulties, the loss of hundreds of billions of dong in the first half of the year has increased the pressure on this real estate business. Novaland admitted that it is still not able to fully pay off the outstanding debts from 2022 to present, and the group is looking for a new restructuring plan for these debts to have a way to handle them from the end of 2026 to the beginning of 2027.

Efforts to remove legal obstacles but still many burdens

Although there has not been much progress in improving business efficiency and debt payment, in the second quarter of 2025, Novaland said that key projects such as Aqua City, NovaWorld Phan Thiet, and NovaWorld Ho Tram have completed many key legal steps after many years of efforts to remove obstacles.

Novaland projects in the central area of Ho Chi Minh City are also being accelerated by working groups to remove legal obstacles, creating a basis for early calculation of land use fees.

However, Novaland said that completing all legal procedures for the projects is still a story that cannot be completed in a short time, especially the stage of calculating land use fees and preparing funds to fulfill financial obligations when notified by the authorities.

For example, at NovaWorld Phan Thiet, the project has not yet completed the land use fee calculation, and the next big challenge for Novaland is to mobilize more capital to be able to pay the land use fee at once for the entire lease term for more than 381 hectares of commercial service land at this project.

According to Novaland, despite achieving many important legal milestones in the second quarter of 2025, the capital demand for Novaland to continue building and completing all projects is extremely large.

To resolve urgent financial issues, on August 7, Novaland will hold an extraordinary shareholders' meeting to approve a plan to issue private shares to convert debt and change board members.

"Despite facing many challenges, Novaland is implementing flexible solutions that closely follow reality to ensure the rights of stakeholders, making recovery efforts and expecting to soon return to growth trajectory," Novaland informed.

In early 2025, Novaland proposed two revenue plans for 2025, one of which was to achieve VND13,411 billion or VND10,453 billion. Notably, both of these plans were targeted by Novaland with no profit, and one plan even resulted in a loss of hundreds of billions of dong.

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NGOC HIEN

Source: https://tuoitre.vn/novaland-tiep-tuc-lo-du-doanh-thu-tang-vot-20250729100114558.htm