Coteccons, Vietnam’s leading construction company, announced Friday the appointment of Vo Hoang Lam as its new general director after leaving the position vacant for 18 months.
Lam, 44, was previously a board member and deputy general director of the private firm.
He has been with Coteccons since the early days of its establishment and has held many important positions in the company including chief commander, division director, project director and general director of subsidiaries.
His predecessors Nguyen Sy Cong and Vo Thanh Liem had left Coteccons and become senior leaders at other construction companies. Liem served as CEO of Coteccons for only seven months, from the beginning of August 2020 to March 2021.
Coteccons faced many top-level personnel challenges after some major changes in shareholder structure led to a series of executives leaving the firm, including founder Nguyen Ba Duong. In October 2020, Duong resigned as chairman after more than 17 years of leading the business.
"The company faced a lot of pressure from the public, shareholders and investors and was even disadvantaged when bidding for projects due to the vacancy in the general director’s position. But we decided not to hurry in making an appointment when the management machine was still stable," Coteccons chairman Bolat Duisenov said in a Friday release.
In the first half of the year, Coteccons's net revenue and after-tax profit reached VND5,193 billion ($222.4 million) and VND5.4 billion ($231,200), almost flat and down 18 times compared to the same period last year, respectively.
After six months, Coteccons, listed on the Ho Chi Minh Stock Exchange as CTD, had fulfilled only 34.6% of the year’s revenue plan and 25% of the year's profit target.
The provision for bad debts incurred from 2018 to 2020, which Coteccons called "past burdens," along with current difficulties in the real estate and construction sector exerted great pressure on the company's second-quarter profit margins, according to its financial statement.
The "past burdens" that have persisted for many years, the central bank's tightening of credit for the real estate sector, the corporate bond market being tightened following the cancellation of nine bond issuances by real estate developer Tan Hoang Minh over "untrue information disclosure", supply chain disruptions, geopolitical conflicts, rising input material costs, and a shortage of laborers due to the lingering effects of the pandemic were factors that impacted Coteccons's profits, the statement said.
One of the projects the company has had to make the heaviest provision for is Viet Star Holdings - a member company of property developer Tan Hoang Minh Group. The project had been handed over and become operational since 2019. Despite efforts to recover payments, Coteccons had to make bad debt provisions of VND242 billion ($10.36 million), increasing the accumulated provisions from 2020 to Q2/2022 to VND484 billion ($20.74 million).
On the Ho Chi Minh City Stock Exchange, the CTD share price hit VND63,200 ($2.7) at the closing session on August 5.