Danang House (NDN) loses in stocks, business cash flow is negative by hundreds of billions

Danang House (NDN) lost hundreds of billions of dong in stock investment, added a member to the Board of Directors from another securities company

In the documents for the 2023 Annual General Meeting of Shareholders scheduled to be held on June 24 in Da Nang, Da Nang Housing Development Investment Joint Stock Company (NDN) announced additional information about 4 new personnel in the Board of Directors for the 2020-2025 term, including Mr. Vo Ngoc Khang, Ms. Cao Thi Thien, Mr. Nguyen Ngoc Quang and Mr. Nguyen Van Tam.

The most notable of these is Mr. Vo Ngoc Khang, born in 1992. Mr. Khang used to work at 3 securities companies: VNDirect Securities, Da Nang Securities and VPS Securities before being added to the Board of Directors of Da Nang House.

Suffering losses from securities, Nha Da Nang (NDN) has just added new personnel to the Board of Directors from another securities company (Photo TL)

What makes shareholders interested is that in 2022, Nha Da Nang also invested in securities and recorded a loss of about 115 billion VND, setting aside a provision for devaluation of securities investments of 64 billion VND. And at the end of 2022, the amount of assets invested in securities by Nha Da Nang accounted for more than 310 billion VND, equivalent to about 20.5% of the company's total assets.

Nha Da Nang's securities portfolio includes two main stocks, VHM and HPG. Of which, the company invested VND172 billion in VHM, setting aside VND29 billion for provisions. The company also invested nearly VND79 billion in HPG shares, VND36 billion in TCB shares, VND24 billion in DGC shares, VND18 billion in MWG and VND14 billion in VND.

Although in 2023, the company has planned to restructure its securities investment portfolio, the fact that a real estate construction and development company focuses its resources on securities investment is really something that makes many investors apprehensive.

Q1 profit growth but cash flow still negative by hundreds of billions of dong, pressure to pay interest doubled

In 2022, Nha Da Nang recorded net revenue of VND57 billion, with a negative profit after tax of VND143 billion. The reason was a decrease in revenue from the real estate sector, recording a loss of VND126 million last year.

In the first quarter of 2023, the company's revenue increased dramatically to VND 215 billion but remained unchanged compared to the same period last year.

Financial revenue decreased from VND23 billion to only VND10 billion while financial expenses increased sharply from VND7 billion to VND14 billion. Although the company's real estate sector has resumed operations, sales expenses have also increased to VND6 billion. Business management expenses remain at more than VND1 billion.

The company's after-tax profit in the period reached 106 billion VND, 5 times higher than the same period.

It is worth mentioning that despite recording high profits, NDN's cash flow from business operations is still negative at VND 101 billion. This shows that despite profitable business, NDN's cash flow is still not enough to cover expenses during the period.

Regarding net cash flow from operations in the first quarter, revenue from sales and services only reached VND36 billion, despite the reported revenue of VND215 billion. Meanwhile, the company had to pay partners providing services and goods up to VND118 billion.

Caught in violations during equitization, 222 billion VND of NDN was frozen at the bank, cash and cash equivalents decreased by nearly half

Not only is the business cash flow negative, NDN's asset structure is also facing difficulties as asset liquidity declines. At the end of the first quarter of 2023, Nha Da Nang's total assets reached VND 1,398 billion, down 6.6% over the same period. Most of the company's assets are in the form of financial investments, amounting to VND 741 billion.

Cash and cash equivalents decreased by more than 50%, from VND70 billion to only VND34 billion. This shows that the liquidity of assets held by NDN is also being affected.

In addition, Danang House also announced information on handling violations in the equitization process since 2010. Specifically, the dossier determining the enterprise value for equitization in 2010 had many things that were not in accordance with the provisions of the law, causing damage to the state budget.

Based on the investigation results of the Da Nang City Police Investigation Agency, the value of assets damaged to the state budget was used to serve the production and business activities of NDN after equitization. Therefore, the Da Nang City Police Investigation Agency has frozen the account of VND 222 billion of NDN at Viet A Bank - Da Nang Branch.

Source: https://www.congluan.vn/thua-lo-tu-chung-khoan-nha-da-nang-ndn-am-dong-tien-kinh-doanh-ca-tram-ty-dong-post252412.html