Financial income helps Vietnam’s real estate developer Phat Dat avoid Q2 loss

Financial income of VND226 billion ($8.62 million) became the saving grace for Ho Chi Minh City-based Phat Dat Real Estate Development JSC in Q2/2025, offsetting weak core revenue and losses from other activities.

Phat Dat, listed on the Ho Chi Minh Stock Exchange (HoSE) as PDR, posted net revenue of VND19.9 billion ($758,962) in Q2, up 2.4 times year-on-year but sharply down from VND438 billion in Q1.

Its gross profit stood at just VND5 billion ($190,694), insufficient to cover costs or offset losses from joint ventures (VND13 billion) and other activities (VND11.6 billion), according to its Q2 consolidated financial statement.

However, financial activities generated VND226 billion in revenue, while financial expenses dropped to VND64 billion ($2.44 million) from VND73 billion, mostly due to lower interest costs. This financial windfall pushed its profit after tax to VND65 billion ($2.48 million), a 30% year-on-year increase.

The company’s report highlights two major transactions: a VND139 billion ($5.3 million) gain from divesting an investment and an foreign exchange (FX) gain of VND 84.5 billion, both major contributors to financial income.

On June 25, just days before the end of Q2, Phat Dat sold its entire stake in Ngo May Real Estate Investment JSC to Quy Nhon 68 Investment LLC for VND435 billion ($16.59 million), so as Ngo May is no longer its subsidiary.

Founded in 2019, Ngo May is the developer of Q1 Tower - a high-rise complex with two 40-storey towers on a 5,245-sq.m plot, featuring 864 serviced apartments, 362 hotel rooms, shophouses, and internal facilities.

Earlier, in April, the company, chaired by Nguyen Van Dat, successfully converted a $30 million loan into shares priced at VND20,000 ($0.76) each for ACA Vietnam Real Estate III LP. This debt-to-equity swap reduced debt pressure, boosted equity, and recognized an FX reversal of about VND84.5 billion ($3.22 million).

In H1/2025, Phat Dat recorded net revenue of VND458 billion ($17.47 million), up 2.7 times from the same period last year and after-tax profit of VND115.5 billion ($4.25 million), up 13.2%.

Its cash holdings dropped sharply from VND343.7 billion to just VND25.2 billion ($961,098), and held-to-maturity investments also fell to VND100 billion from VND115 billion ($4.39 million).

Conversely, receivables rose to VND7.57 trillion ($288.7 million) from VND6.9 trillion, primarily due to the recognition of a VND337 billion long-term loan receivable. Inventory edged up slightly to VND14.1 trillion, accounting for 58% of total assets.

On the liabilities side, the share conversion with ACA Vietnam raised Phat Dat’s charter capital from VND8.73 trillion to VND9.07 trillion ($345.92 million), while share premium increased significantly from VND70 billion to VND410 billion. However, interest-bearing debt rose VND338 billion to VND5.68 trillion, driven by bank borrowings for project financing and asset acquisition.

Meanwhile, the company’s short-term customer deposits, often seen as a cash buffer for real estate firms, dropped to VND50.8 billion ($1.94 million) from VND133.5 billion at the start of the year. Most of this decline came from the Bac Ha Thanh urban renovation project, where advance payments fell from VND130 billion to VND25.4 billion.

Acceleration in H2

For H2, Phat Dat has set ambitious full-year targets of VND3.3 trillion ($125.86 million) in revenue and VND728 billion ($27.76 million) in after-tax profit, 4 times and 4.7 times higher than the 2024 results, respectively.

By mid-year, it had achieved just 14% and 15.9% of the year's revenue and profit targets, placing pressure on H2 performance.

At the company’s 2025 AGM in late June, CEO Bui Quang Anh Vu confirmed that H2 results will be driven by revenue and profit recognition from the Bac Ha Thanh (Quy Nhon Iconic) project in former Binh Dinh province (now part of Gia Lai province after a merger), stake divestments, and service income.

Phat Dat noted that the macroeconomic climate in H1 showed improvement, supporting a more favorable real estate environment. In Q1, it sold 125 land plots at Quy Nhon Iconic for VND435 billion. In Q2, the company sold over 1,000 units at the La Pura project in former Binh Duong province (now part of Ho Chi Minh City) and plans to launch another 1,000 units in September.

Several other projects are making legal progress and may be monetized soon. The Thuan An 1 project, also in former Binh Duong province, has secured all necessary permits and is ready for launch, with an 80% stake already sold to a foreign partner, expected to settle payment in September.

The Thuan An 2 deal is expected in 2026. The Serenity Phuoc Hai project in Ho Tram, former Ba Ria-Vung Tau province (now part of Ho Chi Minh City) is on track to complete licensing by December, and Phat Dat is preparing land use fees for the upcoming Con Dao resort complex, also in the same locality.

The company is also expanding its land bank in Ho Chi Minh City and surrounding provinces, while adopting a human-centric development model integrated with digital technologies like AI, IoT, and VR to enhance customer experience and operational efficiency.

In the stock market, PDR closed Friday at VND20,200 ($0.77) per share.