Real estate companies still face pressure on capital sources
According to finance and banking expert Nguyễn Chí Hiếu, the fact that many real estate companies have simultaneously paid dividends to investors reflects the positive recovery of the real estate market.
While some real estate companies have paid large dividends to investors, many others in the sector still have to struggle to rotate capital sources to pay debts and reinvest.
Since the beginning of the second quarter of 2024, some real estate companies have finalised the 2023 dividend payment in the form of stocks and cash to investors.
Some have recorded big payment rates, such as Machin01 Equipment Joint Stock Company (stock code MA1) with 120 per cent (30 per cent in cash and 90 per cent in stocks); Sài Gòn Investment Joint Stock Company (SIP) with 31 per cent (16 per cent in cash and 15 per cent in dividends); Nam Từ Liêm Urban Development Joint Stock Company (NTL) with 25 per cent; Phát Đạt Real Estate Development Corporation (PDR) with 20 per cent; and Sonadezi Long Thành Company (SZL) with 20 per cent.
Other companies have also paid dividend at rates from 5 per cent to 15 per cent.
According to finance and banking expert Nguyễn Chí Hiếu, the fact that many real estate companies have simultaneously paid dividends to investors reflects the positive recovery of the real estate market.
However, in reality, the payment does not accurately reflect the extent of the market’s recovery, because the companies’ profits were mostly from the undistributed profits of previous years, Hiếu said.
Noting that it is not excluding the possibility when the market is still facing many difficulties, Hiếu said the companies made the dividend payment with the purpose of attracting the attention of investors.
In contrast to the big dividend payments of some real estate companies, many other companies in the sector are still facing big difficulties and struggling with the rotation of capital to pay interest and recover.
For example, Nam Land Company Limited has owed up to VNĐ900 billion in dividends due to not being able to arrange finances after a series of bad deals or Sài Gòn Thương Tín Real Estate Joint Stock Company (SCR) with total assets of more than VNĐ10.6 trillion, which did not pay dividends in the two consecutive years of 2022 and 2023.
Notably, stocks of many real estate companies such as Sông Hồng Construction Joint Stock Company (ICG), IDJ Vietnam Investment Joint Stock Company (IDJ), Investment and Construction Joint Stock Company No 18 (L18), Danh Khôi Group Joint Stock Company (NRC), Sông Đà No 6 Joint Stock Company (SDC) and Sông Đà Urban Development and Construction Investment Joint Stock Company (SDU) have had their margins cut on the stock exchange because audited after-tax profit of their parent companies in 2023 was negative and was subject to warning, control and transaction restrictions.
However, according to statistics of the Ministry of Construction, capital raising from the bond channel of real estate companies still has some bright spots and it is forecasting business profits and dividend payments of real estate companies in 2024 will be higher than last year.
For example, after a tough period facing an investor confidence crisis in corporate bond issue, real estate enterprises in the first eight months of 2024 issued nearly VNĐ46.1 trillion of bonds, accounting for 21.7 per cent of the country’s total issued bond value.
Director of the Ministry of Construction’s Department of Housing and Real Estate Market Management, Hoàng Hải, said according to the statistics, signs of bond issuance by some real estate enterprises have returned and can be expected to be more stable next time.
However, Hải noted, the pressure of maturing bonds is still a heavy responsibility of real estate enterprises who need to bring confidence to investors for stable and healthy development. — VNS
