Bleak business result may prevent Hoa Binh Construction developing planned projects
Bleak business result may prevent Hoa Binh Construction developing planned projects
Plunging revenue and profit in the first quarter may hinder Hoa Binh Construction Group in arranging money to contribute to the joint venture developing the Nghi Son section of National Highway 45 under the Eastern Cluster of the North-South Expressway as well as other projects signed in the first three months.
Hoa Binh Construction may have run into capital difficulties with its pipeline of projects
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According to the financial statement for the first quarter of this year, Hoa Binh Construction acquired VND5.5 billion ($239,130) in after-tax profit, a decline of 95 per cent compared to the fourth quarter of 2019 and a record low in the last six years.
In addition, its net revenue decreased by 34 per cent on-year to VND2.4 trillion ($104.35 million). As of March 31, its total owners' equity was VND15 trillion ($652.17 million), down VND2 trillion ($86.96 million) on-year.
Hoa Binh Construction affirmed that COVID-19 caused delays in disbursing investment capital, impacting the group’s construction operations.
In addition, the steady decline in apartment supply since 2018 in collaboration with delays in construction due to legal difficulties are another reason behind the bleak business results.
Thus, the group set the target to acquire VND14 trillion ($608.7 million) in revenue and VND200 billion ($8.7 million), signifying decreases of 25 and 52 per cent.
In this first quarter, the group signed contracts to develop two projects, namely Complex Building invested by Golden Hill Investment JSC and The Metropole Thu Thiem invested by Quoc Loc Phat JSC in collaboration with Son Kim Land.
In addition, Hoa Binh is a member in the joint venture of Cienco 4, Hoa Binh Construction Group, Thuan An Trading and Development Construction JSC,Newcity Group JSC, and 18 Transport Construction JSC. The joint venture will develop the Nghi Son section of National Highway 45 under the Eastern Cluster of the North-South Expressway.
