Khang Dien House (KDH) Q1 profit decreased by 33%, foreign fund sold 1.2 million shares

Foreign fund Dragon Capital sells more than 1.2 million shares of Khang Dien House

At the end of May, the foreign fund group Dragon Capital sold an additional 1.2 million KDH shares of Khang Dien House Investment and Trading JSC. After this transaction, the Dragon Capital fund group reduced its ownership of KDH shares from 11.04% to 10.87% of charter capital.

The funds participating in the transaction include Amersham Industries Limited selling 500,000 shares; Vietnam Enterprise Investments Limited selling 500,000 shares; and KB Vietnam Focus Balanced Fund selling 210,000 shares.

The sale of KDH shares by Dragon Capital fund group took place right after the previous purchase of 300,000 shares on May 22. At the same time, the not-so-positive Q1 business results of Nha Khang Dien are also a factor that makes many investors feel worried about the business activities of this enterprise.

Profits still down 33% despite triple revenue growth

According to the financial report for the first quarter of 2023, Khang Dien House recorded net revenue of VND 426 billion, nearly 3 times higher than the same period last year. However, the cost of goods sold also increased from VND 65 billion to VND 93 billion.

Expenses during the period included flat selling expenses at VND12 billion; business management expenses recorded VND56 billion, a slight decrease compared to the same period; financial expenses decreased from VND3 billion to over VND1 billion while financial revenue increased from VND2 billion to VND13 billion.

Khang Dien House (KDH) Q1 profit decreased by 33%, foreign fund Dragon Capital immediately sold 1.2 million shares (Photo TL)

Although recording a 3-fold increase in revenue, Khang Dien House's after-tax profit not only did not increase but also decreased from 299 billion VND to only 200 billion VND, equivalent to a decrease of about 33%.

The reason is that in the first quarter of 2022, the company recorded other profits of up to 305 billion VND while this year it only reached 12 billion VND. When this extraordinary profit was no longer there, Nha Khang Dien's business results decreased significantly despite strong revenue growth again.

Cash flow continued to be negative by another VND1,017 billion in Q1 while profit only reached nearly VND287 billion.

A problem in the business operations of Nha Khang Dien has appeared for nearly a year now, which is that the cash flow from the business operations of this unit has continuously recorded negative hundreds, even thousands of billions of VND. This shows that the company is seriously lacking in cash to pay for its project activities.

In the previous Q4 of 2022, the company recorded pre-tax accounting profit of VND 310 billion. However, the increase in inventory of up to VND 3,737 billion caused the company's cash flow to record a negative VND 480 billion.

Entering the first quarter of 2023, Nha Khang Dien continued to slide with negative operating cash flow of thousands of billions of VND. Pre-tax accounting profit reached only 287 billion VND while operating cash flow was negative 1,017 billion VND, showing that the company's revenue was not enough to cover expenses. Therefore, it is not too difficult to understand that the target for cash and cash equivalents decreased sharply from 2,753 billion VND at the beginning of the period to only 1,476 billion VND at the end of the first quarter.

While mobilizing thousands of billions in bond capital, Khang Dien House still guarantees an additional 2,400 billion VND for its subsidiary.

The story of bond debt in the real estate market has been a hot topic for the past year. Khang Dien House is also a unit that owes bonds up to thousands of billions of VND.

Specifically, in the report on the use of bond capital for two lots KDHH2125001 worth 400 billion VND and KDHH2225001 worth 800 billion VND, the company said the money was used to increase the company's scale of operations.

In which, Khang Dien House bought back 100 billion bonds of lot KDHH2125001 before maturity at the end of 2021. Thus, currently the total amount of bonds that Khang Dien House still owes is 1,100 billion VND with 300 billion VND of lot KDHH2125001 and 800 billion VND of lot KDHH2225001.

However, in the capital use plan, Khang Dien House used 800 billion VND to increase capital at International Consulting Company Limited, so that this enterprise could contribute more capital to Binh Trung Real Estate Investment and Trading Company Limited. This is also the unit that Khang Dien House has just guaranteed an additional loan of 2,400 billion VND despite still having thousands of billions in bond debt.

Binh Trung Real Estate is the investor of the Clarita project in Thu Duc City, Ho Chi Minh City. The project is planned on an area of ​​5.8 hectares and is expected to expand with 2 types of real estate: villas and townhouses.

Source: https://www.congluan.vn/loi-nhuan-q1-cua-nha-khang-dien-kdh-giam-33-quy-ngoai-lien-voi-ban-12-trieu-co-phieu-post250092.html