Vietnam's top contractor Hoa Binh Construction Corporation (HBC) expects to earn VND433 billion ($17.8 million) in after-tax profits next year, 3.5 times higher than the 2023 target.
The company has set the 2024 target despite the likelihood of suffering losses this year.
If the plan is realized, Hoa Binh will regain a profit level it enjoyed in pre-pandemic 2019. However, the figure would still be far short of the peak recorded in 2016-2018.
In the first nine months of 2023, the firm posted revenues of VND5.3 trillion ($217.7 million), just half of the same period in 2022, and nearly VND890 billion ($36.56 million) in losses.
Therefore, the company will finds it hard to fulfil this year's plan, vice chairman Le Viet Hieu said at an extraordinary meeting in mid-October, blaming the situation on gloomy real estate and construction markets. He estimated HBC’s revenue for the year at VND7.8 trillion ($320.43 million) and profits in the negative column.
Regarding future development orientations, the board of directors said the company will follow the principle of increasing revenue and reducing expenses.
They said HBC expected to receive more projects from real estate developers like BRG Group, Gleximco, BIN, Gamuda, CapitaLand, Keppel Land and Sun Group.
Next year, the corporation will participate in domestic bids worth VND9-10 trillion ($410.8 million). It also plans to deploy many projects in foreign markets by 2028, including the U.S., Vanuatu, Australia and Africa. Among them, Africa is the most potential market where labor supply is abundant and HBC is able to offer more competitive bids.
At the same time, the company will aggressively collect bad debts. Of nearly VND9.2 trillion ($337.9 million) in current receivables, more than VND2.8 trillion is expected to be collected in the fourth quarter of 2023 from big debtors like Nova, Sun Group, Gamuda, Sunshine, Vingroup, Cocobay and Ecopark.
Hoa Binh Construction is listed on the Ho Chi Minh Stock Exchange (HoSE) as HBC, which closed Wednesday’s session at VND7,670 ($0.32) per share.