Increasing capital to over 6,300 billion VND, maintaining the goal of listing.

Deo Ca Group's General Meeting of Shareholders: Capital increase to over 6,300 billion VND, maintaining the goal of listing on the stock exchange.

Deo Ca Group plans to issue over 210 million shares (50% of the total issued shares) to existing shareholders to increase its capital to over 6,300 billion VND.

The General Meeting of Shareholders of Deo Ca Group on June 26th approved all proposals, with a business plan for 2024 of VND 8,956 billion in revenue, an increase of over 35%, and after-tax profit of VND 733 billion, an increase of over 14% compared to 2023.

At the end of the first quarter of 2024, Deo Ca recorded revenue of VND 1,750 billion, an increase of 121.52%, and after-tax profit of VND 169 billion, a growth of 39.67% compared to the first quarter of 2023.

Regarding investment activities, Deo Ca has just completed the Cam Lam – Vinh Hao expressway with a total investment of over 8,900 billion VND, put into operation at the end of April 2024. Currently, it is implementing two projects: the Dong Dang – Tra Linh expressway (phase 1) with a total investment of over 14,300 billion VND (commencing in January 2024) and the Huu Nghi – Chi Lang expressway with a total investment of over 11,000 billion VND (commencing in April 2024).

According to the leaders of Deo Ca Group, they are continuing to research investment in projects such as Tan Phu – Bao Loc, Ho Chi Minh City – Chon Thanh, Ring Road 4 section through Binh Duong province, Ho Chi Minh City – Trung Luong – My Thuan (phase 2)… with a total investment of nearly 80,000 billion VND, and the Vietnam – Laos railway project section Vung Ang – Mu Gia , valued at over 47,600 billion VND.

Regarding construction activities, in 2023, Deo Ca completed many projects and packages on schedule, such as the Thung Thi tunnel on the Mai Son - National Highway 45 expressway, the Truong Vinh tunnel on the Nghi Son - Dien Chau expressway, the My Thuan 2 bridge, the My Thuan - Can Tho expressway, the expansion of the Prenn pass road, etc., with a total participation value of over 6,100 billion VND.

The corporation is continuing to carry out a large volume of work on the second phase of the North-South expressway, such as the Quang Ngai - Hoai Nhon expressway, with a total investment of over 20,400 billion VND.

In addition, construction is underway on the Chi Thanh – Van Phong, Tuyen Quang – Ha Giang, Khanh Hoa – Buon Ma Thuot expressways, the Ho Chi Minh Highway section from Chon Thanh to Duc Hoa, the Ho Chi Minh City Ring Road 3, the Tan Van interchange, two connecting roads to Long Thanh Airport (part of the Long Thanh International Airport project), and the Khe Net railway tunnel (part of the Hanoi – Ho Chi Minh City railway line)… with a total value of nearly 15,000 billion VND.

This is an important basis for the Group to formulate the aforementioned growth plan, said Mr. Khuong Van Cuong, General Director of Deo Ca Group.

In terms of operational management, Deo Ca currently manages, operates, and maintains nearly 410km of expressways and national highways, over 30km of road tunnels, and manages 18 BOT toll stations nationwide, ensuring safety and smooth traffic flow.

According to the leaders of Deo Ca Group, in order to participate in investing in nearly 400km of expressways and railway projects in the context of limited resources, Deo Ca is at the forefront of innovation, using the PPP++ model to diversify capital sources, increase mobilization efficiency, and minimize risks throughout the project implementation process.

In this context, P1++ represents budget capital (including central and local government budget capital), P2++ represents equity capital from primary and secondary investors, and P3++ represents capital raised from credit institutions, business partnerships, bonds, etc.

In addition, human resources are a crucial factor in a company's sustainable development strategy.

To supplement working capital and investment capital, Deo Ca Group plans to issue more than 210 million shares (50% of the total issued shares) to existing shareholders. The issuance will be implemented in 2024-2025 and according to the progress of the projects.

If successful, the charter capital of Deo Ca Group will increase from over 4,200 billion VND to over 6,300 billion VND.

Discussion at the Congress

Discussion at the General Meeting of Shareholders

The corporation will propose PPP projects with a total investment of over 131,000 billion VND. What advantages does Deo Ca have to implement these projects, especially the expressway and railway projects?

Mr. Nguyen Tan Dong – Vice Chairman of the Board of Directors of Deo Ca Group: Deo Ca has experience in implementing large-scale projects, notably the Bac Giang – Lang Son expressway project, the Trung Luong – My Thuan expressway project… Despite many challenges, the Group has still performed well and ensured progress.

The corporation has invested heavily in machinery and equipment, which have been fully depreciated, giving it a competitive edge in pricing. The workforce is well-trained, and the corporation collaborates with universities for further training, including offering second-degree programs in railway and metro engineering.

Recently, the corporation embarked on a railway project, a joint venture with a South Korean partner – thereby gaining valuable experience for future projects.

In 2023, the company paid a dividend of 4%, and this year it's 8%. Can the company guarantee this?

Mr. Nguyen Huu Hung, Vice Chairman of the Board of Directors of Deo Ca Group: In 2023, the Group's initial target was 7%, but Deo Ca only paid 4% to continue participating in bidding and projects in the third quarter, such as the Ring Road 4 project from Ho Chi Minh City to Binh Duong; the Dau Giay - Tan Phu project, Ho Chi Minh City - Chon Thanh project… due to the specific nature of this industry requiring the demonstration of significant financial capacity.

In 2024, with the remaining accumulated profits, the Board of Directors is confident that it will ensure dividend distribution as planned.

Does Deo Ca Group have a plan to go public?

This is a goal set by the Board of Directors, part of the 5-year strategy. The past 2-3 years have not been favorable for transportation infrastructure businesses, facing continuous difficulties such as COVID-19, interest rates, and fluctuating material prices, resulting in relatively thin profit margins for transportation infrastructure. Therefore, the Board of Directors has chosen to wait 5 years, until the time is ripe, before seeking shareholder approval in writing to go public.

How are raw material prices and interest rates impacting the corporation?

Mr. Nguyen Tan Dong, Vice Chairman of the Board of Directors of Deo Ca Group: Due to the specific characteristics of the transportation infrastructure industry, the rate of fluctuation in the actual market price of raw materials is increasing faster than the price of raw materials managed by the State – leading to difficulties in controlling prices and costs.

The management recognized and implemented very thorough control measures to limit the impact of market fluctuations. With the price of steel and plastic fluctuating, Deo Ca proactively worked with major suppliers to sign long-term contracts at reasonable prices. They also worked with investors, government agencies, and local authorities to make appropriate adjustments when prices fluctuated.

Regarding interest rates, the transportation infrastructure sector relies heavily on borrowed capital (mostly from state-owned banks). Bank interest rates have been low over the past six months, and although they have increased recently, state-owned banks are unlikely to change them significantly from now until the end of the year, so this will not affect the company.

To mitigate the impact of interest rates, Deo Ca utilizes a diverse range of capital sources. Instead of relying solely on equity and debt as before, it now includes budget funds, business partnerships, bonds, and increased equity capital. We view credit institutions as service providers, so we select partners with the best and most suitable services.

Over the past period, in addition to commercial banks, for large-scale projects we have worked with policy banks such as VDB, with credit limits and interest rates suitable for the infrastructure sector.

What is the assessment of the disbursement of public investment funds, and specifically for the projects of Deo Ca?

Mr. Nguyen Tan Dong, Vice Chairman of the Board of Directors of Deo Ca Group: The projects in which Deo Ca Group participates as a contractor are all key projects, prioritized by the Government and competent authorities – this is a favorable factor, so the progress of disbursing public investment to accelerate the projects is given great attention.

To disburse funds, two main factors are needed: production volume and procedures to expedite disbursement. Regarding production volume, the corporation has overcome the most difficult phase, which was land clearance for the Ring Road 2 project, and resolved the issue of raw material prices. All of the company's projects are currently achieving good production volumes.

Simultaneously, the competent authorities also regularly hold meetings with businesses to update the situation, monitor, and promote periodic disbursement, so the disbursement activities at the Deo Ca project are going well.

Source: https://baodautu.vn/dhcd-tap-doan-deo-ca-tang-von-len-hon-6300-ty-dong-giu-muc-tieu-niem-yet-d218642.html