Cash flow is stuck in unfinished projects
As reported by Lao Dong Newspaper, CIENCO4 is facing many pressures as profits have fallen sharply, cash flow has weakened, while a series of BOT projects have collected tolls for decades but have not yet determined a capital recovery plan.
Not only stopping at investments in transport infrastructure, businesses are pouring more than 900 billion VND into a series of unfinished construction works.
As of March 31, 2025, the total value of CIENCO4's inventory reached more than VND 941.7 billion, up more than 10% over the beginning of the year. Of which, the majority is unfinished production and business costs with more than VND924 billion.
According to the explanation, at the end of the first quarter of 2025, many construction projects have great values. Leaded by Ben Thanh - Suoi Tien Metro Line with over 156.8 billion dong. At this project, Cienco4 Joint Venture and Sumitomo Mitsui Construction Co., Ltd. undertaken underground construction from km 0+132 to km 0+175 metro line 1, section from Ben Thanh station to Ho Chi Minh City Theater Station, the total contract value is more than 3,031 billion VND.
The construction period lasted 48 months and was adjusted to the end of December 2022. Up to now, CIENCO4's work has been completed, but it is still in the stage of completing adjustments in volume exceeding the plan and architecture for acceptance with the investor.
The Long Son Urban Area Project also recorded unfinished production costs of nearly 36 billion VND, including Long Son 1, 2, 3 and 4 subdivisions, which were approved for planning in 2017. As of the end of the first quarter of 2025, CIENCO4 has been granted land allocation decisions by Nghe An Provincial People's Committee with a total area of 262,000m2.
The T&C - 61 Nguyen Truong To Urban Area Project (Vinh City) invested by CIENCO4 Land Investment Joint Stock Company also has an unfinished cost value of more than VND 26.8 billion. The project has a total investment of 156.67 billion VND. The high-rise apartment part was completed and handed over at the end of 2019, however, the housing and service part continues to be implemented.
The remaining unfinished value of VND699 billion is scattered in other projects but the enterprise did not announce details.
Investing in a series of joint ventures and associations but are ineffective
As of March 31, 2025, the Group owns 4 subsidiaries operating in many fields from real estate, construction to trade and services, namely CIENCO4 Land Investment Joint Stock Company; Green Tea Islands Joint Stock Company; Shanghai Investment Company Limited; Education Equipment Joint Stock Company 2.
CIENCO4 also invested in 8 affiliated companies with a total investment value of VND 33.9 billion. In which, at CIENCO4 Consulting Joint Stock Company, the enterprise owns 37.5%; Joint Stock Company 422 (49%), Joint Stock Company 412 (49%), Joint Stock Company 415 (49%), Joint Stock Company 499 (34%). CIENCO4 also owns 49.67% of capital at Cienco4 Japan Bridge Joint Stock Company - a joint venture with a Japanese partner.
As of the end of March 2025, CIENCO4 is investing in 5 other units with a total recorded value of more than 255 billion VND. Of which, the largest investment is 229.5 billion VND in Phuc Thanh Hung Investment Joint Stock Company - the unit established to implement the Dien Chau - Bai Vot component project under the project to build a number of expressway sections on the North - South Eastern route in the period of 2017 - 2020.
Some other investments of CIENCO4 include: 14.5 billion VND in Quang Tri Airport Company Limited; 1.88 billion VND in 246 Traffic Construction Joint Stock Company. Notably, the enterprise is recording an investment in Joint Stock Company 414 and Joint Stock Company 407 with a total value of VND 3.8 billion and VND 5.7 billion, respectively. However, both of these items have been fully provisioned due to prolonged low operational efficiency.
Regarding the investments of joint ventures and associates, CIENCO4 said that the Group must make provisions for bad debt collection and the operations of joint ventures and associates are also ineffective, so it must record losses from the operations of joint ventures and associates. The above factors are the main reasons for profit decline.
