Vinaconex (VCG) buys back 1,400 billion bonds before maturity, sells subsidiary

Vinaconex (VCG) buys back 1,400 billion bonds before maturity

The Hanoi Stock Exchange (HNX) has just announced the bond trading results of Vietnam Construction and Import-Export Corporation - Vinaconex (VCG). Accordingly, this unit has bought back a total of 1,400 billion VND of bonds before maturity since the beginning of the year.

In just the first few days of August, Vinaconex has bought back bonds before maturity 3 times, including: On August 1, 2023, bought back 200 billion VND of bonds of lots VCGH2125005 and VCGH2126006, the buyback amount was 100 billion VND per lot.

Vinaconex VCG buys back 1,400 billion bonds ahead of schedule, continuously divesting capital from subsidiaries, image 1 — Vinaconex (VCG) continuously sells shares in subsidiaries, buys back 1,400 billion bonds before maturity (Photo TL)

By August 4, 2023, VCG continued to buy back VND120 billion of bonds in lot VCGH2126006 and VND80 billion of lot VCGH2126007. Thus, in just the first 4 days of August, Vinaconex bought back up to VND400 billion of bonds before maturity.

And if counting from the beginning of 2023 until now, Vinaconex has had a total of 11 early bond buybacks with a total value of up to 1,400 billion VND.

The early bond buyback comes amid Vinaconex’s poor business performance. The second quarter results show that the company is behind its annual plan.

In the first half of the year, Vinaconex only completed 16.2% of the year's profit plan.

The profit decline started in the first quarter when Vinaconex no longer recorded extraordinary financial revenue. First quarter revenue reached VND1,965 billion, after-tax profit brought in VND16 billion, down 98% compared to the same period. First quarter business results were only equivalent to 2% of the 2023 plan.

According to the consolidated financial statements for the second quarter, the company's net revenue reached VND4,566.9 billion, more than double the same period last year. Gross profit from sales and service provision reached VND430 billion. Gross profit margin decreased from 14.3% to only 9.4%.

Financial revenue in the period decreased to VND119.3 billion, mainly from interest on deposits. Financial expenses increased from VND196.9 billion to VND245.1 billion. Of which, interest expenses accounted for VND213.3 billion, an increase of 9% over the same period.

Vinaconex's second quarter after-tax profit was only 130.3 billion. Compared to the same period last year, VCG's after-tax profit decreased by 24%.

VCG's accumulated revenue in the first 6 months of the year reached 6,532 billion VND, the company's after-tax profit reached 139.2 billion VND. Compared to the initial revenue target set at the beginning of the year, VCG has only completed 40% of the annual revenue plan and 16.2% of the annual profit plan.

Vinaconex's continuous divestments from its subsidiaries

Amidst the difficult business situation, Vinaconex has continuously sold shares in its subsidiaries. Specifically, VCG sold 1.326 million VCM shares of Vinaconex Human Resources and Trading JSC. The transaction was conducted from June 21, 2023 to July 20, 2023.

In addition, another unit, VIMECO JSC, a unit related to Mr. Nguyen Khac Hai, chairman of Vinaconex, has also registered to sell all VCM shares. The amount of VCM shares held by VIMECO is 130,000 shares, equivalent to 4.33% of charter capital. The transaction period is from June 21, 2023 to July 19, 2023.

In addition, Vinaconex also sold 506,000 VCT shares, reducing its ownership ratio from 51% to only 5%. On May 13, VCG also reduced its ownership ratio at Vinasinco from 50% to only 25%. On March 3, 2023, VCG also divested 2 million shares at Vinaconex Trade Development Joint Stock Company (VCTD), reducing its ownership ratio from 55% to 45%.

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