8 businesses suffered continuous losses
According to the audited consolidated financial statements for 2023, Hanoi Construction Corporation ( Parent Company - Hancorp) invested in 37 enterprises with a total value of more than VND 992 billion. However, inspection results show that only 23/37 enterprises reported interest in 2023, of which 5 enterprises, although making a profit, still suffered large accumulated losses. Up to 8 businesses have suffered continuous losses, leading to Hancorp having to set aside a reserve to reduce financial investment prices by more than VND 36.7 billion by the end of 2023.
Many "burried capital" investments before the equitization period have not yet brought about results. Typically, Hancorp2 Construction Joint Stock Company, with an investment capital of 3.7 billion VND to hold 46.07% of charter capital, recorded an accumulated loss of nearly 45 billion VND by the end of 2023 and had set aside 100% of reserves. Mechanical and Construction Joint Stock Company also forced Hancorp to set aside a total investment of VND 2.8 billion after accumulated losses of more than VND 10.5 billion.
Another case is Hung Loi Hydropower Joint Stock Company with a contributed capital of 4.5 billion VND, which has so far had to set up a full reserve because the enterprise has stopped operations. In addition, Hancorp has also invested in many enterprises but has stopped operating such as: Sahabak Joint Stock Company (contributing 19.5 billion VND), Bac Ha Urban Development Joint Stock Company (contributing 3 billion VND), Top-up BOT Vehicle Joint Stock Company No. 1 (contributing more than 3.2 billion VND), all of which have had to set aside 100% of reserves.
The investment of more than 30.8 billion VND in Van Xuan Urban Development Investment Joint Stock Company since 2008, but has not yet implemented the Tan Thanh urban residential area project, Kien Thuy district, Hai Phong. At the time of the inspection in November 2024, the project had not yet been implemented, and the capital continued to be "frozen". The company had to set aside financial investment reserves from 2017.
Hancorp also contributed capital to many joint ventures and joint ventures with gloomy financial situations. The investment in Deo Ca Investment Joint Stock Company accounts for 8.06% of the charter capital, although it reported a profit of more than 87 billion VND in the year, it still suffered a cumulative loss of up to 270 billion VND. Investments in Ho Tay International Joint Stock Company and Phu My Construction Investment Joint Stock Company both recorded high profits in 2023 but still "carried" accumulated losses of hundreds of billions of VND. Of which, Ho Tay International Joint Stock Company reported a profit of more than 40 billion VND, but by the end of the year it still had a cumulative loss of 140.5 billion VND. Similarly, Phu My Construction Investment Joint Stock Company, although making a profit of more than VND145 billion in the year, still suffered accumulated losses of up to VND187 billion.
Financial consequences and risks of prolonging the restructuring process
The ineffective spread of investment capital into too many businesses has directly affected Hancorp's financial capacity. In 2023, businesses must set up large reserves, reduce profits and lead to consequences for cash flow and capital management. This is also the main reason for the delay in restructuring and divesting progress at Hancorp.
In fact, according to the 2020-2025 restructuring plan approved by the Hancorp General Meeting of Shareholders and approved by the Ministry of Construction in Official Dispatch No. 2299/BXD-QLDN dated May 14, 2020, Hancorp must divest all capital in 33 companies with a total contributed capital value of more than VND 896 billion. However, by the time of inspection in November 2024, the enterprise had only divested from 3 companies, while 30 companies had not yet divested.
The prolonged situation of "holding" investments at a loss and stagnating capital depreciation not only wastes resources, but also goes against the policy of arranging and improving the efficiency of state-owned enterprise areas. The inspection conclusion also clearly stated that the responsibility belongs to the Board of Directors, Hancorp Board of Directors and State Capital Representative for the delay in handling ineffective investments.
