Without the provision for bad debts being reversed, HBC will lose 1,115 billion after auditing in 2023, instead of 782 billion as self-reported.
This content was announced in the consolidated financial report of Hoa Binh Construction Group Joint Stock Company (HBC) conducted by AASC Auditing Firm. Accordingly, HBC's after-tax loss last year was VND1,115.3 billion, VND333 billion higher than the self-prepared report, equivalent to more than 42%.
Hoa Binh's after-tax loss fluctuated sharply mainly due to business management costs. HBC set up this fee itself at VND482.9 billion, while the audit report gave the figure of VND757.7 billion, an increase of 57%.
The reason is that in the self-prepared report, Hoa Binh reversed more than 310 billion VND from the provision for bad debts. When auditing, AASC did not record the above reversal but still recorded the provision cost of 417.5 billion VND.
According to the auditing company, Hoa Binh is in the process of completing procedures to secure some advances to supplement appropriate and sufficient evidence on the recoverable value. As of the time of the report's issuance, AASC has not been able to determine whether it is necessary to adjust the indicators on the consolidated financial statements related to these advances. The unit said it has not been able to collect enough confirmation letters for about VND4,100 billion of receivables, mainly short-term receivables from customers.
Thus, Hoa Binh had its second year of business losses. The profit deficit of the previous year decreased by 56.6% compared to 2022. However, the company broke its business plan when it only completed more than 60% of the revenue target and was far from the profit target of 125 billion VND.
The newly updated figures also pushed the company's accumulated loss up 12.6% to VND3,240 billion. This brought its equity by the end of 2023 to VND93.4 billion, down 92% compared to 2022.
After two years of losses, Hoa Binh plans to achieve revenue of VND10,800 billion and after-tax profit of VND433 billion this year. If successful, Hoa Binh will regain the same profit level as in 2019, the time before the pandemic. However, the above figures are still quite far from the peak profit period of 2016-2018.
In the coming time, the board of directors said the company will follow the principle of increasing revenue and reducing expenses. This year, the company will participate in domestic bidding for VND9,000-10,000 billion with a volume of about 40-45%. At the same time, Hoa Binh will implement many projects in foreign markets until 2028, including the US, Vanuatu, Australia, and Africa. Of which, Africa has the most potential, with an abundant labor force and HBC's prices are competitive compared to many current contractors.
The company is also actively recovering bad debts. By the end of 2023, Hoa Binh had nearly VND3,265 billion in bad debts, an increase of 20%.
Siddhartha
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