Hoa Binh Group focuses on restructuring to cut losses after 4 quarters

4 consecutive quarters, total loss of nearly 2,100 billion VND

Hoa Binh Construction Group Joint Stock Company (Hoa Binh Group) has announced its consolidated financial report for the third quarter of 2023.

Accordingly, net revenue of this period reached 1,893 billion VND, down half compared to the same period last year, so gross profit only reached 40 billion VND. In addition, the company's financial revenue also decreased, while financial expenses increased.

Although Hoa Binh Group has found many ways to reduce business management costs from 153 billion VND to 79 billion VND, this enterprise still cannot avoid losses.

According to the financial report, pre-tax profit was negative VND163 billion and after-tax profit was negative VND170 billion. As a result, Hoa Binh Group suffered a net loss of nearly VND169 billion in the third quarter of 2023, while in the same period last year it made a profit of more than VND6 billion.

Thus, for 4 consecutive quarters, Hoa Binh Group's financial situation has been in loss, totaling nearly 2,100 billion VND.

In the first 9 months of this year, Hoa Binh Group recorded net revenue of VND5,356 billion, down 51% compared to the same period last year and a loss of VND884 billion.

As of September 30, 2023, Hoa Binh Group's accumulated loss was VND 2,980 billion. Currently, the group's equity is only VND 352 billion; the total debt payable is up to VND 13,344 billion, of which the total debt is nearly VND 5,000 billion.

Explanation and restructuring

Hoa Binh Group has also just issued a document explaining measures to overcome the situation of securities being controlled and restricted from trading; explaining measures and roadmap to overcome the causes leading to the situation of securities being warned.

On May 10, 2023, HBC received a decision from HOSE to transfer the Company's shares from warning status to control status due to late submission of the audited 2022 Financial Report more than 30 days after the prescribed deadline.

Then on May 18, 2023, HBC received a decision from HOSE to move the company's shares from controlled to restricted trading due to the delay in submitting the audited 2022 Financial Report more than 45 days from the prescribed deadline.

Hoa Binh Group said that it has closely coordinated with the auditing unit to complete and publish the 2022 Audited Financial Report on June 30, 2023. In the coming time, Hoa Binh Group will strictly comply with regulations on information disclosure within the deadline.

However, on July 10, 2023, Hoa Binh Group received a decision from HOSE to put the stock on warning status from July 13, 2023 because the undistributed profit after tax as of December 31, 2022 on the 2022 Consolidated Audited Financial Statements was negative.

Regarding this issue, Hoa Binh Group explained: The Group is implementing comprehensive restructuring to improve the efficiency of production and business activities.

Chairman of the Board of Directors of Hoa Binh Group, Mr. Le Viet Hai shared that in less than 5 months, the restructuring plan has been implemented. In which, financial restructuring is a key issue.

Hoa Binh Group has signed agreements with international partners to support the group's international business expansion, many projects have signed agreements. In addition, the Group is also vigorously managing receivables.

In early October 2023, Hoa Binh Group reached an agreement with 99 suppliers to convert debt into shares at a price of VND 12,000/share.

From this exchange, the partners have become members of Hoa Binh Group to carry out the Group's mission together. This is the most remarkable success in the period when Hoa Binh Group faced many difficulties.

Regarding restructuring of subsidiaries, the Company is looking for partners to transfer subsidiaries that are not part of Hoa Binh Group's strategy in the near future.

Source