Mr. Le Viet Hai, Chairman of Hoa Binh Construction Group Corporation (HBC), has just sent a letter to shareholders before the General Meeting of Shareholders scheduled to take place on June 27.
In the letter, Mr. Hai said that 2022 and 2023 can be affirmed to be the most difficult period for Hoa Binh in its journey of more than 3.5 decades. In particular, the last 5 years have been a time of many extremely unfavorable events for the construction industry, especially in the fields of urban housing construction and tourism, the two main construction fields of Hoa Binh.
Since 2017, very few urban housing projects have been granted construction permits, while the human resources in the industry have continued to increase but the source of work has not increased but on the contrary has decreased sharply. The lack of jobs has created an imbalance in supply and demand, causing great disadvantages for contractors. The construction market has become more competitive than ever.
The negative changes in the world in general and Vietnam in particular over the past years have made the already difficult construction businesses even more difficult, especially for Hoa Binh.
As the leader of Hoa Binh, Chairman Hai would like to take responsibility for not fulfilling his duty to develop Hoa Binh as expected, in accordance with the identified strategic vision, not worthy of the trust and expectations of shareholders, and "having let some very unfortunate incidents happen that seriously affected the reputation of the leadership and the Hoa Binh brand".
In the letter, Mr. Hai said that Hoa Binh took a step back to renew itself with a comprehensive restructuring strategy with the determination to help Hoa Binh overcome challenges and gradually stabilize to continue developing and restore its inherent position.
This plan has been implemented by the Board of Directors and the Executive Board of Hoa Binh, focusing on important groups of solutions proposed by the new General Director Le Van Nam.
Specifically, Hoa Binh will restructure finances; restructure human resources; restructure products and markets; restructure the management system; restructure the system of member companies and affiliates.
On June 23, 89 suppliers and subcontractors agreed to offset debts with shares worth VND650 billion. Upon completion of asset revaluation, issuance of shares to strategic shareholders and successful reversal of accumulated bad debt of up to VND2,059 billion.
“In fact, throughout its business history, Hoa Binh has never written off any debt. Most of the debts that were previously provisioned have been reversed. In the past, due to unavoidable circumstances, Hoa Binh had to resolve the debt collection issue through the authorities and 10 cases have been tried, Hoa Binh has been successful in all 10 cases. The total value that Hoa Binh will collect through the trial results is nearly 50% higher than the total principal debt,” Mr. Hai emphasized.
With many optimistic signals, Hoa Binh still maintains the 2023 revenue target determined from the beginning of the year at 12,500 billion VND and profit: 125 billion VND.
In 2022, with revenue of VND 14,154 billion, for the first time, Hoa Binh's business results had negative profits and a negative of up to VND 2,572 billion. The provision for bad short-term receivables alone amounted to over VND 2,059 billion.
Hoa Binh's leaders affirmed that the Board of Directors and the Executive Board clearly recognized that the current difficulties are only temporary. When the storm passes, Hoa Binh will continue to develop and will definitely restore its inherent position and will make a strong breakthrough in the near future because there is a law of nature "After the rain, the sky will be bright again".
Previously on May 19, Hoa Binh Construction announced a series of resolutions on high-level personnel changes, notably the appointment of Mr. Le Van Nam to the position of General Director from June 1.
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