Property developer Nam Long makes Q2 profit from Dong Nai project stake sale

Vietnamese real estate major Nam Long Group posted an after-tax profit of VND160 billion ($6.3 million) in the second quarter of 2024, mainly thanks to selling part of its Paragon Dai Phuoc project in the southern province of Dong Nai.

However, the figure represented a decrease of 31% over the same period last year.

Nam Long, listed on the Ho Chi Minh Stock Exchange (HoSE) as NLG, sold a 25% stake in its 45-hectare Paragon Dai Phuoc project to Japan’s Paragon Urban Development Co., Ltd for VND662 billion ($26 million), earning a profit of VND230.7 billion ($9.1 million).

After the transaction, Nam Long's stake in Paragon Dai Phuoc dropped from 75% to 50%, while Paragon Urban Development Co., Ltd now holds 25%, Thai Binh Investment JSC 21.6%, and Tan Hiep Investment Limited Company 3.4%.

Nam Long established Paragon Dai Phuoc Company Limited in 2018 to invest in the 45-hectare Paragon Dai Phuoc project in the Dai Phuoc eco-tourism urban area in Nhon Trach district, Dong Nai province. In 2022, the firm sold a 25% stake in the project to ensure operating cash flow. After selling another 25%, Nam Long's investment in the project is VND985 billion ($38.82 million).

In Q2, the company recorded VND252 billion ($9.93 million) in net revenue from sales and services, down 73.6% year-on-year. Meanwhile, total sales and administrative expenses stood at VND184 billion.

In the first half of this year, Nam Long recorded VND457 billion ($18 million) in net revenue, down 61.5% over the same period last year, mainly from selling houses and apartments at its Southgate and Izumi projects. Its after-tax profit hit VND95 billion ($3.74 million), down 62% year-on-year.

This year, Nam Long has set ambitious revenue and after-tax profit goals of VND6,657 billion ($262.3 million) and VND821 billion ($32.35 million), respectively. In the first half, the company only fulfilled 7% and 11.6% of the yearly revenue and profit targets.

CFO Nguyen Huy Duc said that by the end of 2023, Nam Long Group had a total pre-sale value exceeding VND8 trillion ($315.2 million). The company plans to record VND6 trillion from project handovers this year, and the rest in 2025 and 2026.

In a challenging market context, Nam Long will apply flexible methods such as working with banks and partners to reschedule payment and handover deadlines, he added.

A bright spot in Nam Long's business picture, the amount paid in advance by buyers increased sharply from VND3,815 billion to VND4,519 billion ($178 million). Of which, that from real estate rose by VND1,000 billion to VND4,132 billion.

Nam Long owns a land fund of more than 680 hectares in Ho Chi Minh City, Long An, Dong Nai, Can Tho and Hai Phong. This year, the group is promoting M&As and developing affordable products, with priority given to Ehome, one of its strengths.

On the stock market, NLG closed Tuesday at VND41,100 ($1.62) per share.