Hoa Binh Construction & Real Estate Corp (HBC) has adjusted its total revenue plan in 2023, raising it by VND5 trillion (US$212 million) to VND12.5 trillion.

Of the estimate, revenue recorded from backlog is estimated at VND7.5 trillion, new contract revenue at VND2 trillion and exports of construction materials at VND1.3 trillion. Profit after tax is forecast to increase by VND25 billion to VND125 billion.

This was the information given at the 2023 Annual General Meeting of Shareholders held in HCM City yesterday.

The target value of bid winning for this year is VND17 trillion, including VND9 trillion winning civil contracts and VND8 trillion winning industrial and infrastructure contracts.

In 2022, HBC achieved VND14.15 trillion of net revenue, fulfilling 80.85 per cent of the yearly plan, up 24.59 per cent over the same period in 2021. The company's net loss was VND2.59 trillion. Due to the loss, the company did not pay dividends in 2022.

Le Viet Hieu, Vice Chairman of the Board of Directors of HBC shared about the business strategy for the period 2024-2026. HBC targets debt to equity ratio to decrease to 1, cash flow from production and business activities will be positive from 2024 and reach VND600 billion by 2026. In 2024, gross profit will increase by 6 per cent and net profit up by 2 per cent. In 2026, gross profit will increase by 9 per cent and net profit up by 4 per cent.

"2022 and 2023 are the most difficult periods in the past 35 years of Hoa Binh. Particularly, the last five years have been a period of many adverse events for the construction industry,” Hieu said.

Since 2017, Viet Nam's construction industry has faced difficulties because there are very few projects licensed for construction, while resources in the construction industry increased continuously. The imbalance of supply-demand had caused great disadvantages for contractors. There were businesses that accepted bid values lower than costs to get jobs, he said.

The COVID-19 pandemic had a strong impact on HBC’s revenue. This disease also affected the price of materials. In early 2022, there was a dispute in Eastern Europe and the entire world economy was seriously affected. Tourism real estate investors faced difficulties due to the lack of international visitors, he said.

The above fluctuations make it more difficult for construction businesses, especially HBC. For the first time, HBC recorded a negative profit in 2022, the provision for bad debts amounted to VND2.06 trillion.

At the meeting, the Board of Directors submitted a plan to issue 274 million shares in the form of private placement at a minimum price of VND12 per share this year, corresponding to the minimum mobilised capital of VND3.29 trillion.

The company will use this money to supplement business capital, swap debt with partners (subcontractors, suppliers, manufacturers) with a total value of VND1.05 trillion, pay debts and invest in development projects. As of June 23, 2023, 89 suppliers and subcontractors agreed to offset debt in shares with a value of VND650 billion.

According to information from Le Van Nam, General Director of HBC, there are currently four partners interested in the share issuance of HBC and have signed the MoU with the company. In which, a partner from Australia is willing to spend $60-100 million to buy HBC shares. — VNS