The construction giant posted a net loss of more than VND700 billion in its semi-annual audited financial report, compared to a profit of more than VND100 billion in its previous self-made report.
Hoa Binh Construction Group Joint Stock Company (HBC) has just announced its audit report with a sharp decrease in profits.
According to a newly released report, the construction giant suffered a consolidated net loss of more than VND711 billion in the first half of this year, while its previous independent report recorded a profit of more than VND100 billion. The difference is nearly VND815 billion.
Hoa Binh's main business indicators all decreased compared to the previously published report. Of which, revenue decreased by nearly VND30 billion, recorded at more than VND3,460 billion after auditing. Cost of goods sold did not change significantly, causing gross profit to decrease by the same amount.
Financial activities also shrank. Audited financial revenue decreased by more than VND72 billion due to the adjustment to reduce revenue from transferring subsidiaries and increase interest on loans with Tien Phat Sanyo Home.
The biggest impact on the audited report was a decrease in other profits of more than VND650 billion. The reason given by Hoa Binh was the adjustment to reduce profits from the sale of assets at the parent company.
The sudden loss after the audit pushed the accumulated loss of this enterprise to more than 2,800 billion VND by the end of the second quarter, exceeding the contributed capital of shareholders (2,741 billion VND). Hoa Binh's equity is only more than 500 billion VND, while its liabilities are recorded at more than 13,300 billion VND.
Auditing unit Ernst & Young Vietnam (EY) also noted that, in addition to accumulated losses, Hoa Binh has overdue loans, some of which have been extended by banks. For the remaining loans that are overdue or about to mature, the company is in the process of negotiating extensions.
"These conditions indicate the existence of a material uncertainty that may cast significant doubt about the Group's ability to continue as a going concern," the auditors said.
Hoa Binh Construction is one of the largest construction companies on the stock exchange, along with Coteccons. However, the difficulties of the real estate market since the second half of last year have affected Hoa Binh's business activities. As of the second quarter, this company has suffered losses for three consecutive quarters.
In addition, earlier this year, Hoa Binh also experienced several weeks of "power struggles" between Mr. Le Viet Hai and Mr. Nguyen Cong Phu regarding the position of Chairman of the Board of Directors. Following the decision of the Ho Chi Minh City Civil Judgment Enforcement Department, Mr. Le Viet Hai continued to hold the position of Chairman of the Board of Directors and legal representative of HBC.
Minh Son
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