Mekong South (VC3) at risk of breaking the 2023 plan, short-term debt triples

Mekong South (VC3) at high risk of breaking its 2023 business plan

According to the consolidated Q3 financial statements of Nam Mekong Group (code VC3), net revenue from sales and service provision reached 192.9 billion VND. Most of which came from real estate business revenue with 191.3 billion VND, Service provision revenue accounted for 1.6 billion VND.

Cost of goods sold accounted for 132.8 billion VND, gross profit reached 61 billion VND. Equivalent to gross profit margin of 31.6%.

During the period, financial revenue decreased by 57% to only VND1.4 billion. Meanwhile, financial expenses increased 2.4 times compared to the same period, to VND843 million.

Mekong Delta VC3 risk of 2023 business plan, short-term debt increases 3 times, picture 1 — Only completing nearly 12.9% of 2023 after 9 months, South Mekong (VC3) is at risk of breaking the annual plan (Photo TL)

Selling expenses increased to VND14.3 billion as the company recovered its real estate business in the third quarter. Business management expenses also increased by 8.5%, accounting for VND8.2 billion in the third quarter of 2023.

Nam Mekong's total after-tax profit in the third quarter of 2023 reached 31.8 billion VND, the after-tax profit of non-controlling shareholders accounted for only more than 1 million VND.

Cumulative revenue in the first 9 months of the year of Nam Mekong reached 383.9 billion VND, cumulative profit after tax of parent company shareholders reached 56.6 billion VND. Compared with the target set by VC3 at the beginning of the year with revenue of 1,873 billion VND, profit after tax of parent company shareholders of 434.8 billion VND, VC3 only achieved 20.5% of the revenue target and 12.9% of the annual profit plan.

Thus, if in the fourth quarter, VC3 does not have any breakthrough in business operations, it is almost certain that Nam Mekong will fail its 2023 business plan.

Short-term debt increased 3.2 times, business cash flow continued to be negative 358.4 billion VND

The possibility of breaking the 2023 business plan is relatively high, VC3 is also under great pressure when debt increases sharply as well as business cash flow is continuously negative by hundreds of billions of VND.

Specifically, at the end of the third quarter of 2023, VC3's total assets reached VND 3,546.3 billion, down 4.5% over the same period. Of which, cash and cash equivalents accounted for VND 134.6 billion, not much fluctuation compared to the beginning of the year.

Receivables increased sharply from VND491.6 billion to VND772 billion. Inventory still accounted for VND2,378.1 billion, a slight decrease compared to the beginning of the year. Of this inventory, the Bao Ninh 2 Urban Area project still accounted for VND1,877.5 billion, equivalent to nearly 80% of the total inventory.

At the same time, this inventory also accounts for 52.9% of VC3's total assets. Following that is the inventory at The Charms Binh Duong project with 485.2 billion VND, equivalent to 13.7% of total assets.

Regarding VC3's capital structure, payables account for VND2,290.4 billion, equivalent to 64.6% of total assets. Notably, short-term debt accounts for VND384.2 billion, 3.2 times higher than at the beginning of the period. In return, long-term debt has decreased from VND123.5 billion to VND3.3 billion.

According to the cash flow statement, Nam Mekong's net cash flow from operating activities was also negative VND358.4 billion in the third quarter of 2023. Net cash flow from financing activities increased by VND143.9 billion with the amount of money collected from borrowings accounting for VND279.7 billion.

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