Hoa Binh Construction records record profits, asset liquidation contributes greatly

Q2-2024 profit surges but HBC still has a "headache" with accumulated losses of thousands of billions - Photo: HBC

Hoa Binh Construction Group Corporation (HBC) has just announced its consolidated financial report for the second quarter of 2024 with a slight decrease in revenue, but a record increase in profit since its listing.

Specifically, in the second quarter, HBC's net revenue reached nearly VND2,160 billion, down about 5% compared to the same period last year. Due to a sharp increase in cost of goods sold, the company's gross profit decreased by 74%, to only VND99.8 billion.

In return, this period HBC recorded a doubling of financial revenue, reversed provisions for bad debts and other unexpected income, so it still reported a net profit of nearly 685 billion VND.

Thus, HBC has had 3 consecutive quarters of profit after many quarters of loss, since the end of 2022.

According to the financial statement explanation, the positive contribution to HBC's business picture comes from the provision reversal of more than VND 220 billion.

This amount comes mainly from the reversal of bad debt provisions of up to VND292 billion, while in the same period the enterprise lost VND412 billion to set aside.

In addition, HBC also recorded other income of nearly VND527 billion, while in the same period it was only VND6.6 billion. According to the explanation, this income mainly comes from liquidation and sale of fixed assets.

In the first 6 months of 2024, HBC achieved net revenue of VND3,811 billion, down 10% compared to the same period last year. Profit after tax in the first half of this year reached VND740 billion, while in the same period, it lost VND713 billion.

In 2024, Hoa Binh aims to achieve total revenue of VND 10,800 billion and consolidated profit after tax of VND 433 billion.

Compared to the consolidated profit target, the company chaired by Mr. Le Viet Hai has exceeded it by more than 70%, although it is only halfway there. Meanwhile, the revenue target needs to be improved further to achieve the target assigned by shareholders.

Also thanks to the extraordinary results in the second quarter, HBC's accumulated loss at the end of June also decreased to nearly 2,500 billion VND, instead of more than 3,240 billion VND at the end of last year.

However, on the balance sheet, short-term receivables continued to increase, reaching VND11,219 billion and accounting for nearly 72% of HBC's total assets.

With the characteristics of the construction industry, companies like HBC always have a "headache" with receivables or construction debts. At the end of June, HBC still had a negative operating cash flow of more than 678 billion VND, possibly due to large receivables.

Source: https://tuoitre.vn/xay-dung-hoa-binh-lai-ki-luc-thanh-ly-tai-san-gop-cong-lon-20240718114917302.htm