In the second quarter of 2023, the real estate market has not shown any signs of improvement. The entire market recorded a low number of transactions, and the number of new real estate products launched on the market was almost non-existent.
The business results of the second quarter of 2023 and the first 6 months of 2023 of a series of real estate brokerage businesses clearly show the tight situation of this type of business.
Shocking revenue drop, deep negative profit
According to the financial report for the second quarter of 2023, Danh Khoi Group Joint Stock Company (HNX: NRC) recorded a sharp decrease in consolidated net revenue of 55 times compared to the same period to more than 1.9 billion VND. Of which, revenue from real estate consulting and management services and revenue from project investment cooperation activities were recorded at 0. Only brokerage services and other services brought Danh Khoi more than 1.9 billion VND.
Therefore, although the cost of goods sold was completely reduced to nearly 38 million VND, the company still only had a gross profit of 1.9 billion VND (same period gross profit was more than 89.5 billion VND).
In the first 6 months of the year, the company only earned more than 1.9 billion VND in net revenue. After deducting all expenses and taxes, Danh Khoi reported a loss of 3.8 billion VND in the second quarter of 2023 and a loss of more than 20.6 billion VND in the first half of 2023.
The company's inventory as of June 30, 2023 also remained the same as at the beginning of the year at VND 61.13 billion, mainly in unfinished production and business costs.
Sharing the same situation as Danh Khoi, Dat Xanh Real Estate Services Joint Stock Company (Dat Xanh Services, HoSE: DXS) recorded revenue in the second quarter of 2023 at VND 662 billion, down 49% compared to the same period last year. Revenue decreased by 50% but cost of goods sold only decreased slightly by 15%, causing Dat Xanh Services' gross profit to only VND 150 billion, equivalent to less than ¼ of the same period.
In the Explanation section, Dat Xanh Services showed that real estate service revenue had the sharpest decline, up to 73%, down to less than 192 billion VND. Besides the decline in net revenue, the company's financial revenue was not much better.
Therefore, at the end of the second quarter of 2023, Dat Xanh Services recorded a loss of VND 17.2 billion while in the same period last year it made a profit of more than VND 256 billion. This was the third consecutive quarter that this business reported a net loss.
In the first 6 months of the year, the "big brother" in the real estate brokerage industry reported a loss of more than 61 billion VND, a long decline compared to the profit of 474 billion VND in the first half of 2022.
Profit after tax report "thin as rice leaves"
On a brighter note, Khai Hoan Land Group Joint Stock Company (HoSE: KHG) recorded a sharp drop in revenue in the second quarter of 2023 but still managed to salvage some net profit.
Specifically, Khai Hoan Land recorded net revenue from sales and service provision of just over 3.3 billion VND, down 80 times compared to the same period last year. The reason is that the company incurred additional returned goods of up to 31.8 billion VND, eroding almost all of the company's revenue in the second quarter of 2023.
Besides, in the second quarter of 2023, the company only earned more than 12 billion VND from real estate brokerage revenue, while in the same period this figure was more than 271 billion VND.
On the contrary, the company's financial revenue was a bright spot, reaching more than 109 billion VND, but financial expenses were reduced by nearly half, down to 26 billion VND.
However, the sharp decline in revenue from core business activities also affected Khai Hoan Land's profits. At the end of the second quarter of 2023, this brokerage company reported a 48% decrease in profit to 45 billion VND. In the first 6 months of the year, Khai Hoan Land's net revenue reached 263 billion VND and after-tax profit reached 101 billion VND, down 43% and 35% respectively compared to the same period last year.
Similarly, having once nurtured thousands of real estate brokers and being famous for its team of professionally trained brokers, Century Real Estate JSC (CenLand, HoSE: CRE) also could not avoid the situation of profits being "as thin as rice leaves".
Specifically, in the second quarter of 2023, the company recorded net revenue of nearly VND 401 billion and net profit of more than VND 9.5 billion, down 35% and 88% respectively over the same period last year.
Explaining this result, the company said that the real estate market in the second quarter continued to face many difficulties and unfavorable factors that appeared from 2022. Although the real estate market and capital market have improved compared to the first quarter, they have not really improved and transactions have not been really active.
Sharing at the 2023 Annual General Meeting of Shareholders held at the end of April, CenLand's General Director said that the number of the company's brokerage staff up to this point has decreased by about 40-50% of its staff.
In addition, Chairman of the Board of Directors of Cenland Nguyen Trung Vu shared in the congress that on average, each month, he has to spend about 2-3 apartments at a loss to support the company and he thinks there are still a few hundred apartments left to help the company get through this period.
Looking at the cumulative revenue structure in the first 6 months of 2023, real estate brokerage and investment services continue to be the mainstay in CenLand's revenue structure. However, the profit of this segment dropped sharply to below 5 billion VND; the net profit margin of this segment was only 1% (same period at 10.7%).
Is real estate brokerage still attractive?
The Vietnam Association of Realtors (VARS) report on the health of the real estate market shows that the number of transactions in the past period was less than 50% compared to last year. Both supply and demand in the market have seriously decreased, causing many businesses to continuously report losses, real estate brokers to be in difficulty, poverty and unemployment.
VARS said that the difficulties in the real estate market are clearly reflected in business results when many brokerage businesses reported losses in the first two quarters of 2023, marking the worst period since 2017.
Previously, VARS data showed that the estimated number of active brokers is now only about 30%-40% compared to the early 2022 period.
Notably, brokerage businesses or investors that have arranged sales brokerage departments have laid off 50% or more of their staff in various forms such as temporarily stopping signing contracts for 3-6 months, laying them off, keeping them as collaborators, etc.
The situation of layoffs is not only strong in leading enterprises but also stronger in other small businesses.
The real estate market in the first 6 months of the year is still a prolonged low note.
VARS believes that this is a challenging period for brokerage firms that are not competitive enough to survive, but it is also an opportunity for professional firms to rise above and develop more sustainably.
However, VARS believes that the career prospects of real estate brokers are still great despite the difficult market period, with many challenges due to high competition. Therefore, brokers must always learn, constantly improve their skills and maintain professional ethics and reputation with customers .
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