According to analysts at MB Securities Company (MBS), the profit picture for the third quarter of 2024 of real estate enterprises is not optimistic, with a forecast of negative growth of 3% over the same period, while the profit of the whole market is projected to be quite positive, with a growth rate of up to 19.5%.
Before the third quarter financial report announcement season, the consolidated semi-annual financial reports of real estate enterprises after being reviewed by the auditing unit revealed many worrying points.In particular, some enterprises that had suffered losses became more and more loss, even turning from profit on self-made reports into large losses after review.
For example, the 2024 reviewed semi-annual financial report of No Va Real Estate Investment Group Joint Stock Company (Novaland) showed a difference in after-tax profit before and after review.Accordingly, Novaland's consolidated after-tax profit in the first 6 months of 2024 recorded a loss of VND 7,327 billion compared to the self-prepared financial report with a profit of VND 345 billion.Or the case of Danh Khoi Group Joint Stock Company is also in a similar situation.After auditing, the enterprise lost more than VND 10 billion, a large difference compared to the profit of more than VND 7 billion compared to the previous self-prepared report.
Besides, a common picture today is that many real estate enterprises also continuously report losses right from the time they prepare their own financial figures without needing the "examination" of the auditing unit.For example, Quoc Cuong Gia Lai Joint Stock Company reported a loss of VND 16.6 billion in the first half of the year, continuing the loss trend of the same period last year (VND 13.7 billion).In the revenue structure, the real estate segment decreased sharply.
Tien Phuoc Group Joint Stock Company (Tien Phuoc Group) has just reported its financial situation for the first 6 months of 2024 with a net loss of more than VND 181 billion.In the same period in 2023, this enterprise also reported a full-year loss of about VND 160 billion.Attracting attention with many large projects, however, in recent years, Tien Phuoc Group's business situation has been quite gloomy.
Meanwhile, in just the first 6 months of 2024, the debt/EBITDA ratio (profit before deducting expenses) of the real estate industry increased to 3.7 times, from 2.7 times in 2023; cash resources increased by only 5%; cash flow from business activities recovered slightly but remained negative.
Of which, more than 2/3 of real estate enterprises listed on the stock exchange have cash flow to repay debt from weak to extremely weak levels.Operating cash flow is below 5% of total debt, especially for investors affected by project legal issues such as LDG Investment, Quoc Cuong Gia Lai and Novaland.The heavy dependence on short-term loans causes significant refinancing risks.
Credit rating agency FiinRatings further noted that the ability to access capital sources of real estate enterprises is much more difficult than in the previous period.Previously, real estate enterprises could access diverse and flexible capital sources, from investment cooperation contracts, from home buyers, bonds, bank loans, etc., but now these channels are all facing difficulties.
Mr. Le Hoang Chau - Chairman of the Ho Chi Minh City Real Estate Association - commented that the health of real estate enterprises is still very weak.In the past, many businesses faced difficulties and went through a "serious illness", but have now overcome the "life and death" stage.The businesses that have survived to this point are a good thing.Therefore, real estate businesses should "cut their coat according to their cloth", carefully consider their investment capacity, avoid spreading themselves thin and arrange their financial resources appropriately.
