Hoa Binh Construction Group, a leading Vietnamese construction contractor, made losses of nearly VND713 billion ($29.5 million) in the first six months of the year, an audited financial statement says.
The loss was nearly VND815 billion ($33.8 million) higher than the pre-audit figure.
This plunge was attributed to Hoa Binh's profit from other businesses decreasing significantly, by VND652.2 billion ($27 million) to nearly VND6 billion ($248,900). The company said that the difference was also high because the report has not recorded profits from the sale of Matec Construction Machinery Co., Ltd. and liquidation of several fixed assets.
Hoa Binh’s H1/2023 net revenues of VND3.46 trillion ($143.6 million) was nearly VND30 billion ($1.24 million) less than the same period last year.
The post-audit loss figure pushed up the company's accumulated losses by the end of Q2/2023 to more than VND2.8 trillion ($116.2 million), surpassing shareholders' contributed capital of VND2.74 trillion ($113.7 million).
At the end of Q2/2023, Hoa Binh's equity was VND500 billion ($20.7 million), while liabilities exceeded VND13.3 trillion ($551.75 million).
Auditing firm EY Vietnam also noted that in addition to accumulated losses, Hoa Binh has overdue loans, including some that banks have granted extensions for. The company is negotiating extensions for other loans that are overdue or about to expire.
"These conditions indicate the existence of material uncertainties that may cast significant doubt on the group's ability to continue as a going concern," the auditor said.
Hoa Binh Construction is one of the largest construction companies in the country, along with Coteccons. However, difficulties in the real estate market since Q2/2022 has affected its business. With Q2/2023, the firm has reported losses for three consecutive quarters.
The Ho Chi Minh City Stock Exchange (HoSE) has put HBC shares on warning from July 13 after undistributed after-tax profits recorded in the 2022 audited financial report was negative. HBC closed the Thursday session at VND10,000 ($0.42) per share.
Earlier this year, Hoa Binh experienced many weeks of "power disputes" between Le Viet Hai and Nguyen Cong Phu regarding the chairman’s position. Per a decision by a municipal arbiter, Hai continues to be the chairman and legal representative of HBC.