Property developer Novaland's profits drop 34% to $98 mln in 2022

Novaland, a leading Vietnamese property developer, reported consolidated after-tax profit of more than VND2,293 billion ($97.78 million) in 2022, down 34% year-on-year and meeting just 35.2% of its target.

Novaland, listed on the Ho Chi Minh Stock Exchange as NVL, earned consolidated net revenue of VND11,152 billion ($475.6 million), down 25% and reaching just 31% of the target.

Of this, revenue from sales was nearly VND9,221 billion ($393.2 million) from the handover of projects like NovaWorld Phan Thiet, Aqua City, NovaWorld Ho Tram, NovaHills Mui Ne, Soho Residence, and Victoria Village. Revenue from service provision hit more than VND1,930 billion ($82.3 million).

In Q4/2022, NVL recorded net revenue of VND3,241 billion ($138.2 million) and after-tax profit of VND239.4 billion ($10.21 million), down 29% and 73.5% year-on-year, respectively.

As of December, 31, 2022, NVL's total assets stood at more than VND257,365 billion ($10.98 billion), up 27.5% compared to the end of 2021. Of this, inventory accounted for nearly VND134,485 billion ($5.74 billion), mainly from real estate for sale under construction with VND122,559 billion ($5.23 billion).

In 2022, the company recorded short-term receivables of more than VND52,982 billion ($2.26 billion), more than 2 times higher than the end of 2021. The majority portion of this was deposits to buy shares, to receive contributed capital (VND19,852 billion), NVL said.

The sharp increase in receivables and inventory in 2022 pushed NVL's cash flow from business activities to negative VND3,262 billion ($139.1 million), while it was VND3,841 billion ($163.8 million) in the same period last year.

NVL shares closed Wednesday's morning session at VND14,500 ($0.62) per unit.

In January, Hoang Thu Chau, NovaGroup's general director and Novaland board member, registered to sell 2.28 million Novaland (NVL) shares from February 1 to March 2, citing personal reasons.

Between October 14 and November 11, NovaGroup bought 1.822 million NVL shares of the eight million shares registered. Between October 14 and November 3, Bui Cao Nhat Quan, son of NovaGroup chairman Bui Thanh Nhon, bought two million NVL shares, raising his holding at Novaland to 83.24 million shares, or 4.269% of its chartered capital.

Recently, Novaland’s board of directors approved a plan to issue shares to its bondholders. Under the plan, five bonds with a par value of $200,000, equivalent to more than VND23 billion owned by Citigroup Global, will be converted into shares at a price of VND85,000 ($3.43 now) per share.

The bonds were part of 1,500 convertible bonds issued on July 16, 2021 to international investors, arranged by the Bank of New York Mellon and Credit Suisse.

Citigroup Global invested $1 million in the bonds, receiving an annual coupon rate of 5.25%. The initial conversion price was VND135,700 per share, then adjusted to VND85,000 on January 19, 2022.