Novaland changed from profit to loss of more than 7,300 billion VND after audit

Novaland's consolidated profit after tax in the first 6 months of 2024 recorded a loss of VND 7,327 billion due to having to set aside provisions for land rent and land use fees payable for the Lakeview City project. In the photo: panoramic view of the Lakeview City project in Thu Duc City - Photo: NGOC HIEN

The audited semi-annual financial report 2024 of No Va Real Estate Investment Group Joint Stock Company (Novaland, stock code: NVL) has a difference in after-tax profit before and after the audit, mainly due to the requirement to set up provisions for the current reporting period according to the auditor's own opinion, most of which comes from the tax provision at the 21st Century project.

Novaland turns from profit to loss

Novaland's consolidated after-tax profit in the first 6 months of 2024 recorded a loss of VND 7,327 billion compared to the independent financial report with a profit of VND 345 billion.

Novaland representative said that this loss mainly comes from the provision for land rent and land use fees payable according to the 2017 land price plan of the 30.106ha Nam Rach Chiec project (An Phu ward, Thu Duc city), commercial name is Lakeview City project (investor is 21st Century International Development Company Limited), based on the tax authority's announcement on January 8, 2021.

Provision value for payables is 4,358 billion VND.

Novaland said it is recommending that the relevant agencies consider and thoroughly handle the land price calculation plan for this project. The provisioned value will be adjusted and reversed when conditions are met.

Accordingly, Lakeview City is the project that this enterprise is exchanging with the 30,224ha project in Binh Khanh ward, Thu Duc city (compensation and site clearance completed in 2008 according to the land allocation decision in 2004).

In 2016, the Ho Chi Minh City People's Committee decided to approve the land price plan according to market price for the 30.224ha land plot in Binh Khanh ward and the Lakeview City project land plot to settle the swap for Novaland with the time of determining land price for both projects at the same time in 2008.

After determining the value of land use rights and the difference in location between the two plots of land, the company had to pay an additional amount of nearly VND 52.7 billion after exchanging the project, and the enterprise recorded this financial obligation in its accounting books in 2016.

However, Novaland said that on December 29, 2020, the Ho Chi Minh City People's Committee issued Decision No. 4777 approving the land price plan for the 30.106ha Nam Rach Chiec land plot with the land price plan as of April 2017 (instead of 2008).

Accordingly, the Ho Chi Minh City Tax Department issued a notice of land rent payment and a notice of land use fee payment with a total amount of nearly VND5,176 billion. Novaland did not agree with the determination of the time for calculating land use fee as April 2017 because the enterprise had completed compensation in 2008.

What does Novaland say about the going concern assumption?

In the semi-annual financial report, the independent auditor expressed an opinion on Novaland's going concern assumption.

Regarding the above content, Novaland said it will continue to implement many solutions to create enough cash flow to finance business operations. In the first 6 months of 2024, the handover value recorded revenue of VND 1,891 billion, an increase of 37% over the same period, recorded from the handover at projects such as NovaWorld Phan Thiet, NovaWorld Ho Tram, Aqua City, Palm City...

Novaland's audited semi-annual financial report also recorded total consolidated revenue of VND3,731 billion, including revenue from sales, service provision and financial activities.

Novaland said it is accelerating the implementation of key projects, in parallel with investing in a diverse system of utilities and organizing many programs to increase the value of the destination. Novaland said the company continues to restructure its finances, gradually restore business operations, restore investor confidence and fulfill its commitments to customers.

Previously, the Ho Chi Minh City Stock Exchange (HoSE) decided to put No Va Real Estate Investment Group Corporation's shares on warning list from September 23. The reason is that this real estate company is late in submitting its audited semi-annual financial report for 2024 compared to the prescribed deadline.

Novaland said that on the date of issuance of the audited financial statements, the Ho Chi Minh City Tax Department and Thu Duc City Tax Department issued a decision to terminate the enforcement of the administrative decision on tax management pending the results of the settlement of land use fees and land rents by the competent authority.

Source: https://tuoitre.vn/novaland-tu-lai-chuyen-sang-lo-hon-7-300-ti-dong-sau-soat-xet-20240927175941536.htm