Construction major Hoa Binh posts record quarterly profit

Hoa Binh Construction Corporation earned VND682 billion ($26.9 million) in second-quarter net profit, its all-time quarterly high.

The result represents a significant turnaround from the loss of VND268 billion ($10.6 million) recorded in the same period last year, according to the firm’s Q2 consolidated earnings report.

The figure for the first half of the year was VND740 billion ($29.23 million), 70.5% higher than its whole-year target.

Hoa Binh Construction, listed on the Ho Chi Minh Stock Exchange as HBC, attributed the positive results primarily to reduced management costs following the reversal of receivable provision expenses.

Additionally, HBC increased its customer debt collection efforts and reduced labor costs and related expenditures as part of a restructuring plan. The company also recorded profits from the sale of machinery and equipment.

In Q2, HBC reported revenue of VND2.16 trillion ($85.32 million) from sales and services, which was steady over the year. Its consolidated profit plunged 74% year-on-year to VND100 billion ($3.95 million) due to a 10% rise in cost price.

HBC’s financial revenue doubled year-over-year to VND46.18 billion ($1.82 million), following the transfer of its subsidiary Matec Co., Ltd. and its affiliate Anh Viet Mechanical And Aluminum Glass Corporation.

Its financial cost slumped to VND130 billion ($51.35 million) in Q2 from VND138 billion ($54.51 million) in the same spell last year.

As of end-Q2, HBC had total assets of VND15.6 trillion ($617.4 million), including VND11.21 trillion ($443.13 million) in accounts receivable. Its losses plummeted to VND2.49 trillion ($98.67 million) thanks to significant net profit.

The firm raised its charter capital from VND3.47 trillion ($137.14 million) after issuing 73.08 million shares to 99 suppliers and sub-contractors under the debt-equity swap.

The company expects a brighter outlook after a gloomy 2023, with numerous projects secured from its partners.

On May 20, HBC signed a strategic deal with CNCTech to carry out projects valued at VND12 trillion ($474 million) between 2024 and 2028. These projects include industrial parks, warehouses, logistics centers, social housing, and more.

In 2024-2026, CNCTech will have Hoa Binh develop the Ba Thien 1 and Nam Binh Xuyen Green Park industrial parks totaling VND5 trillion ($197.49 million) in the northern province of Vinh Phuc.

On May 18, a joint venture between Hoa Binh and Japan’s Kajima broke ground on the VND1 trillion ($39 million) AEON Tan An mall project in Tan An town, the southern province of Long An. Construction will take 16.5 months and be completed in Q3/2025.