Hodeco's (HDC) real estate business continues to decline sharply

In the third quarter of 2024, Hodeco's real estate business brought in VND124.5 billion, down about 26% year-on-year. After-tax profit was recorded at VND13.33 billion, down 58.9%.

In the third quarter of 2024, Hodeco's real estate business brought in VND124.5 billion, down about 26% year-on-year. After-tax profit was recorded at VND13.33 billion, down 58.9%.

Ba Ria - Vung Tau House Development Joint Stock Company (Hodeco, stock code: HDC - HOSE) has just announced its financial report for the third quarter of 2024 with net revenue down 26% year-on-year to nearly VND125 billion. The reason is that real estate business activities decreased sharply by 41% to more than VND66 billion.

Although financial revenue was nearly 3 billion VND, 3.8 times higher than the same period last year, and total expenses decreased by 24% to 27 billion VND, it was not enough to help Hodeco avoid a recession in the quarter when net profit was only over 13 billion VND, down 60%.

Road to Ecotown Phu My residential project. (Photo: Viet Dung)

The company said business activities have not yet improved because the general situation of the real estate market remains very difficult in the third quarter, affecting sales.

In the first 9 months of the year, net revenue reached more than VND 381 billion and net profit nearly VND 65 billion, down 20% and 23% respectively over the same period. Compared to the 2024 plan of achieving revenue of nearly VND 1,658 billion and profit after tax of VND 424 billion, the real estate company headquartered in Vung Tau is still far from its target, having only achieved 23% and 15% respectively.

At the end of the third quarter of 2024, Hodeco's total assets increased by 4% compared to the beginning of the year to nearly VND 4,885 billion. Of which, the majority of assets (28%) were inventories of nearly VND 1,344 billion, an increase of 18%, mainly concentrated in production costs and unfinished business of nearly VND 1,246 billion.

This enterprise still has nearly VND2,615 billion in debt, down 6% compared to the beginning of the year, with financial loans of nearly VND1,651 billion, down 3% compared to the beginning of the year and accounting for 63% of total debt.

Hodeco's third quarter 2024 financial report also shows that the company's inventory is about 1,343 billion VND. Of which, the majority is production costs, unfinished business and real estate goods.

According to the Company's explanation, short-term unfinished production and business costs are mainly concentrated in The Light City Complex Housing Project (VND 915.9 billion); Housing Area at Bai Dau, Ward 5, Vung Tau City (VND 94.4 billion); West 3/2 Housing Area (VND 72.3 billion); Ecotown Phu My Housing Area (VND 57.5 billion)... totaling VND 1,245 billion.

Meanwhile, the inventory is real estate goods: Apartment 199 Nam Ky Khoi Nghia (lot A); Residential area on Nam Ky Khoi Nghia street, Vung Tau city (01 plot); Fusion Suites Vung Tau apartment.

Previously, Hodeco was administratively fined VND900 million by the People's Committee of Ba Ria - Vung Tau province for handing over houses without completing social infrastructure and traffic connections.

Specifically, Hodeco committed administrative violations: handing over houses to customers when social infrastructure had not been completed according to the schedule recorded in the approved project; not ensuring connection with the common infrastructure system of the area, not completing the entire exterior; not having a document approving the acceptance results from the competent authority to put the social infrastructure project into use according to regulations.

In addition to administrative sanctions, the People's Committee of Ba Ria - Vung Tau province also requested Hodeco to stop handing over the house, complete the construction and have a written acceptance of the results of the inspection by the competent State agency as prescribed. All costs of organizing the implementation of remedial measures shall be paid by the Company.

Source: https://baodautu.vn/hoat-dong-kinh-doanh-bat-dong-san-cua-hodeco-hdc-van-giam-manh-d228975.html