Major Vietnamese contractor Hoa Binh reports profit after two years of losses

By Minh Hue
Wed, January 29, 2025 | 10:00 am GMT+7

Hoa Binh Construction Group, one of Vietnam's top contractors, posted an after-tax profit of VND851.8 billion ($33.96 million) in 2024, surpassing its target by 96.7% and marking a strong recovery after two years of significant losses.

The substantial profit growth was largely driven by the sale of assets in Q2/2024, according to the company's newly released financial statement for Q4/2024.

However, revenue reached only VND6,375 billion ($254.2 million), which was 59% of the year's target and the lowest level in eight years.

Hoa Binh is one of the leading construction contractors in Vietnam. Photo courtesy of Thoi Bao Tai Chinh Vietnam (Vietnam Financial Times) newspaper.

Hoa Binh is one of the leading construction contractors in Vietnam. Photo courtesy of Thoi Bao Tai Chinh Vietnam (Vietnam Financial Times) newspaper.

In Q4, the company reported revenue of over VND1,587 billion ($63.3 million), down 27.5% year-on-year.

Despite the decline in revenue, gross profit surged by 155% to VND136 billion ($5.42 million) due to significant reductions in the cost of goods sold.

Although the company incurred a net loss of VND29 billion ($1.16 million) from core business operations, a surge in other incomes (mainly from asset sales) helped Hoa Binh turn itself around with a post-tax profit of VND9.45 billion ($376,794) in the quarter.

As of December 31, 2024, Hoa Binh's total assets amounted to VND15,235 billion ($607.46 million), nearly unchanged from the beginning of the year. Short-term receivables accounted for a significant portion, reaching VND10,720 billion, or 70.4% of total assets. The company also set aside a provision of up to VND1,947 billion ($77.63 million) for doubtful debts.

Inventory saw a sharp decline of 30.8% to VND1,577 billion ($62.88 million). However, long-term unfinished assets increased substantially to VND789.9 billion, primarily due to the development of new real estate projects.

Although liabilities decreased by 9.5% to VND4,270 billion ($170.26 million), Hoa Binh still faces considerable financial pressure, with a debt-to-equity ratio of 3.5 times. In 2024, the company paid up to VND405 billion ($16.15 million) in interest, equivalent to over VND1 billion ($39,870) per day.

By the end of last year, Hoa Binh grappled with a cumulative loss of VND2,412 billion ($96.17 million), which accounted for 69.5% of its charter capital. This not only affects the company’s ability to pay dividends but also creates challenges in attracting investors.

Hoa Binh, registered on the Unlisted Public Companies Market (UPCoM) as HBC, closed last Friday at VND6,300 ($0.25) per share.

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