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Real estate companies report profits, indicating potential market recovery and growth

VIETNAM, February 5 - HÀ NỘI — Despite the uncertain future of the real estate market, several prominent companies in the industry have recently announced significant profits. This has sparked optimism among investors and experts, suggesting that the market may be on track for a gradual recovery and a fresh phase of growth.

No Va Land Investment Group Corporation (Novaland - NVL) has announced its financial report for the fourth quarter of 2023, with a decrease in revenue but a surprisingly strong increase in profit, reaching the highest level in the past three years at over VNĐ1.64 trillion, nearly 13 times higher than the same period in 2022.

For the entire year of 2023, Novaland reported a net profit after tax of nearly VNĐ685 billion, lower than the VNĐ2.18 trillion in the previous year.

The news of Novaland's significant profit in the fourth quarter, which contributed to the overall annual profit, comes as a surprise as the real estate market remained sluggish, and the company had to make efforts to accumulate funds for debt repayment in the past year, not to mention the challenges faced by many ongoing projects.

One surprising case is Vinhomes (VHM) of billionaire Phạm Nhật Vượng. The company reported a net profit after tax of VNĐ33.3 trillion in 2023, a 14 per cent increase compared to the previous year, thanks to growth in revenue.

Vinhomes recorded consolidated net revenue of VNĐ121.4 trillion, a 49 per cent increase compared to 2022, mainly driven by the handover of 9,800 low-rise real estate units in the Vinhomes Ocean Park 2 and 3 projects.

The company also saw its total assets increase by 24 per cent to VNĐ447 trillion, and its equity capital increase by 23 per cent to VNĐ182 trillion by the end of 2023.

Another case is An Gia Investment and Development Corporation (AGG), which reported a pre-tax profit of VNĐ109 billion and a net profit of VNĐ65 billion in the fourth quarter. This represents a significant improvement compared to the losses of VNĐ72 billion and VNĐ186 billion in the same period of the previous year.

The company closed 2023 with a pre-tax profit of VNĐ582 billion, a 2.6-fold increase, and a net profit of VNĐ460 billion, a 4.8-fold increase compared to the previous year. This is also the highest net profit in the past five years and the second-highest in history (second only to VNĐ565 billion in 2018).

It is worth noting that inventories decreased by 46 per cent to VNĐ2 trillion, accounting for 21.6 per cent of the assets, concentrated in projects such as The Westgate (VNĐ1.38 trillion), The Standard (VNĐ304 billion), The Signal (VNĐ233 billion) and The Sóng (VNĐ56 billion).

Similarly, Khải Hoàn Land Corporation (KHG) reported a negative core business operation of VNĐ44 billion in Q4/2023 but managed to turn losses around and record a profit of over VNĐ7 billion due to investment co-operation.

Century Real Estate Corporation - Cen Land (CRE) also showed a slight improvement in Q4/2023, recording a modest profit of VNĐ1 billion.

Many other real estate companies have reported significant decreases in revenue and profit. However, a positive point is that these companies have reduced losses through cost-cutting measures, streamlining operations, and strengthening sales and asset transfer to restructure their businesses after a few difficult years.

Apart from large companies with various restructuring activities, small and medium-sized real estate enterprises have also shown more positive signals in terms of revenue. Although they have not yet reached the levels of previous years, it may indicate a warming up of the general real estate market.

In the stock market, the overall picture of real estate stock prices is no longer pessimistic.

According to statistics, only 21 listed real estate stocks experienced price declines in 2023. Two stocks remained unchanged with less than 1 per cent decrease, while the remaining 59 stocks increased, with seven of them increasing by over 100 per cent.

The highest increase of 166 per cent was recorded by the stock VC7 of BGI Corporation; DTD (Investment and Development Thành Đạt) and QCG (Quốc Cường Gia Lai) also had similar increases, reaching 161 per cent and 159 per cent, respectively. Next are VPH of Vạn Phát Hưng (113 per cent), PDR of Phát Đạt Real Estate (105 per cent), SZC of Sonadezi Châu Đức (104 per cent), and TCH of Hoàng Huy (102 per cent). — VNS