Taseco Land reports sharp increase in third quarter profit

Third quarter profit increased 21 times

Taseco Real Estate Joint Stock Company (Taseco Land) has just announced its financial report for the third quarter of 2024, recording positive results in the context of the real estate market facing many challenges.

Specifically, net revenue increased by 65% ​​over the same period, reaching nearly 311 billion VND. Despite the sharp increase in cost of goods sold and expenses, the company reported a profit after tax of 185 billion VND, nearly 21 times higher than the same period.

According to Taseco Land, in the last business period, not outside the general situation of real estate enterprises, Taseco Land had to endure heavy cost pressure. Along with the expansion in revenue, selling expenses increased nearly 12 times, from 1.5 billion VND to 17.6 billion VND. Business management expenses also increased by 24%, recorded at 51 billion VND. These figures significantly affected the gross profit of 68 billion VND that the enterprise generated during the period.

The main driver of Taseco Land’s impressive profit growth is financial activities. Last quarter, the company brought in VND258 billion in revenue, nearly 14 times higher than the same period last year. Meanwhile, although interest pressure caused financial expenses to increase sharply, this item was still controlled within a reasonable threshold of VND36 billion, the lowest among all types of expenses.

Another positive sign is that Taseco Land recorded 17 million VND from its affiliates. Although the figure is modest, it has completely improved compared to the loss of more than 100 million VND in the same period last year.

In the first 9 months of the year, Taseco Land's net revenue reached VND1,249 billion, up 82% over the same period. The biggest contributor to the above results was real estate transfer activities with a growth rate of 163%, bringing in VND744 billion.

According to Taseco Land, financial revenue also increased dramatically when recording 249 billion VND in profit from transferring subsidiaries. Comparing with the financial reports of the first and second quarters, it can be determined that this is the profit generated in the third quarter, which is also the main factor driving the impressive growth in the period. This profit comes from the transaction of transferring all shares of TAH Investment Joint Stock Company, which was carried out in August. This is the investor of the Office Complex project combined with Trade and Services at lot B2CC4 in the Starlake Urban Area complex.

The transfer of the project on lot B2CC4 in the Starlake Urban Area complex helped Taseco Land's revenue increase dramatically. Photo: Taseco Land

Regarding this deal, Vietcombank Securities (VCBS) previously forecast that Taseco Land could record more than VND222 billion in financial revenue. Thus, the actual results exceeded VCBS's forecast.

In the context of the difficult real estate market, project transfer activities have helped Taseco Land generate a large source of revenue, significantly improving profit results. At the end of the first 9 months of the year, this real estate company reported a profit after tax of 202 billion VND, an increase of 7.6 times compared to the same period.

On the other hand, restructuring assets through transfer activities also creates conditions for Taseco Land to implement new projects.

As of September 30, 2024, Taseco Land announced total assets of VND 9,426 billion, down 5% compared to the beginning of the year. Of which, inventories accounted for the largest proportion at 53%, recorded at VND 4,964 billion. Compared to the beginning of the year, this item increased by 29% compared to the beginning of the year, mainly due to the arising of unfinished production and business costs at new real estate projects, including: High-rise housing project of land lot A3/CT2 in Viet Hung, Long Bien, Hanoi (VND 871 billion), Southeast Housing Group project on To Huu street (VND 320 billion), New urban area project South of Duy Tien town administrative center, Ha Nam (VND 39 billion).

Meanwhile, long-term unfinished assets reached VND1,025 billion, down 37%, mainly due to no longer recording unfinished construction costs at the B2CC4 Starlake Urban Area project.

In terms of capital, as of the end of the third quarter, Taseco Land's total liabilities were VND5,715 billion, down 4% compared to the beginning of the year. Of which, total debt was VND3,765 billion, up 15% compared to the beginning of the year. The company reduced short-term debt from VND1,126 billion to VND847 billion but increased long-term debt from VND2,137 billion to VND2,917 billion.

Notably, as of September 30, 2024, Taseco Land is still holding VND 533 billion in deposits from the party that will receive a part of the Starlake project through the transfer of the target company.

Expected profit of 1,200 billion VND from transfer activities

According to VCBS's report, in addition to the B2CC4 project, Taseco Land also transferred the Landmark 55 project at lot B3 CC2 Starlake Urban Area.

This is a 23,600m2 project, including two plots of land to build an office building (13,600m2) and a hotel building (10,000m2). Of which, the office block has been signed by Taseco Land to transfer to Maple Tree, the transaction is expected to be completed in 2025, helping to record about 560 billion VND in financial revenue. In addition, Taseco Land is also actively looking for partners to transfer the hotel block with expected profits of over 500 billion VND.

Thus, the transfer of the above land lots will contribute more than VND 1,200 billion in profit to Taseco Land in the period of 2024 - 2026, and at the same time be an important source of money for the enterprise to invest in key urban and industrial park projects in the new cycle.

Central Riverside – one of Taseco Land’s key projects. Perspective image

At present, the real estate market has begun to show positive changes, a reversal point has appeared when liquidity improves, interest in many segments recovers, and Taseco Land's business activities are expected to continue to improve.

In the coming time, according to Taseco Land, the company is preparing to enter the handover phase of the Central Riverside project (Thanh Hoa). With a variety of product types such as townhouses, villas and a good selling price (about 55 - 60 million VND/m2), Central Riverside is expected to bring in more than 4,500 billion VND in revenue and be an important contributor to Taseco Land's business results in the next few years.

Ngoc Minh

Source: https://vietnamnet.vn/taseco-land-bao-loi-nhuan-quy-iii-tang-dot-bien-2337079.html