Hoa Binh Construction reports further losses of 333 billion VND after audit.

Without reversing the provision for doubtful receivables, HBC reported a loss of 1,115 billion VND after auditing in 2023, instead of 782 billion VND as reported in its self-prepared report.

This information was revealed in the consolidated financial report of Hoa Binh Construction Group Joint Stock Company (HBC), audited by AASC. According to the report, HBC's after-tax loss last year was VND 1,115.3 billion, which is VND 333 billion higher than the self-reported figure, equivalent to over 42%.

Hoa Binh's after-tax loss fluctuated significantly, mainly due to business management expenses. HBC's own estimate of these expenses was VND 482.9 billion, while the audited report presented a figure of VND 757.7 billion, an increase of 57%.

The reason is that in its self-prepared report, Hoa Binh reversed over 310 billion VND from provisions for doubtful receivables. However, during the audit, AASC did not record this reversal but still included a provision expense of 417.5 billion VND.

According to the auditing firm, Hoa Binh is in the process of securing certain advances to provide appropriate and sufficient evidence regarding their recoverable value. As of the date of this report, AASC could not determine whether adjustments to the consolidated financial statements related to these advances were necessary. The firm stated that it had not yet been able to obtain sufficient confirmation letters for approximately VND 4,100 billion in receivables, primarily short-term customer receivables.

Thus, Hoa Binh has experienced its second consecutive year of business losses. The profit deficit from the previous year decreased by 56.6% compared to 2022. However, the company failed to meet its business plan, achieving only over 60% of its revenue target and falling far short of its profit target of 125 billion VND.

The newly updated figures also pushed the company's accumulated losses up by 12.6% to VND 3,240 billion. This reduced the equity capital at the end of 2023 to VND 93.4 billion, a decrease of 92% compared to 2022.

After two years of losses, Hoa Binh plans to achieve revenue of VND 10,800 billion and after-tax profit of VND 433 billion this year. If successful, Hoa Binh will regain profit levels equivalent to those of 2019, before the pandemic. However, these figures are still quite far from the peak profit period of 2016-2018.

Looking ahead, the management stated that the company will adhere to the principle of increasing revenue and reducing expenses. This year, the company will participate in domestic bidding worth 9,000-10,000 billion VND, with approximately 40-45% of the work completed. Simultaneously, Hoa Binh will implement numerous projects in overseas markets by 2028, including the US, Vanuatu, Australia, and Africa. Of these, Africa holds the greatest potential, with a large and readily available workforce, and Hoa Binh's pricing is currently competitive compared to many other contractors.

The company is also actively recovering bad debts. As of the end of 2023, Hoa Binh had nearly 3,265 billion VND in bad debts, an increase of 20%.

Tat Dat

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