Vietnamese conglomerate Bamboo Capital posts 36-fold profit growth in Q3

Ho Chi Minh City-based Bamboo Capital Group recorded an after-tax profit of VND331.2 billion ($13.1 million) in the third quarter of 2024, an astounding 36-fold expansion year-on-year.

The profit surge was attributed to the group's strong performance across various business segments and effective cost management at its energy arm BCG Energy, which saw financial expenses decrease significantly by VND274.2 billion ($10.84 million), or 75.3%, compared to the previous year.

According to its Q3 financial statement released on Wednesday, Bamboo Capital, listed on the Ho Chi Minh Stock Exchange as BCG, logged a net revenue of VND1.14 trillion ($45.1 million), an 11.8% increase year-on-year.

The revenue growth was primarily driven by the renewable energy segment, contributing VND339.7 billion or $13.43 million (29.9%), followed by real estate VND287.2 billion (25.2%) and financial services VND240.3 billion (21.1%).

The real estate segment showed a remarkable recovery, with revenue soaring 194.4% from Q2, thanks to the continued handover of the Malibu Hoi An and Hoian d’Or projects in the central province of Quang Nam.

For the first nine months of 2024, Bamboo Capital's consolidated net revenue reached VND3.24 trillion ($128.1 million), a 14.3% rise from the same period last year.

The renewable energy segment (BCG Energy) made up the largest share at VND1.03 trillion or $40.71 million (31.8%), followed by construction and infrastructure (Tracodi) VND730.9 billion (22.6%), and financial services (AAA Insurance) VND606.2 billion (18.7%).

The real estate segment (BCG Land) contributed VND594.6 billion (18.4%), while the manufacturing segment (including Nguyen Hoang Wood and Tipharco Pharmaceuticals) accounted for 8.5%.

BCG Energy continued to shine, maintaining stable revenue streams due to the operational efficiency of its solar power plants. In the first nine months, its plants generated 604 million kWh, a 16.7% rise year-on-year, with the Phu My solar power plant in the southern province of Ba Ria-Vung Tau alone producing 403.6 million kWh, up 25.2% year-on-year, thanks to an additional 114 MW coming from its second phase, which began commercial operations in June 2023.

The financial services segment, primarily driven by AAA Insurance, also showed remarkable improvement, with its revenue share rising to 18.7% from 7.8% in the same period last year, fueled by a 149% increase in insurance premiums to VND975 billion ($38.55 million). At the end of Q3, AAA Insurance successfully met its 2024 revenue target and is projected to exceed it by 30% by year-end.

Additionally, the Q2 merger of Tipharco Pharmaceuticals contributed 4.6% (VND149 billion) to the group’s total revenue. It showed Bamboo Capital's proactive approach to diversifying its revenue streams to minimize risks and enhance its competitive edge.

The group’s after-tax profit in the first nine months reached VND748.3 billion ($29.6 million), a fourfold increase compared to the same period last year. The surge was mainly driven by effective cost management, highlighted by a significant reduction in financial expenses by VND761.5 billion, or 65.9%, largely due to BCG Energy’s proactive redemption of two packages of private placement bonds worth VND2.5 trillion ($98.85 million), easing pressure regarding interest and asset management costs.

With these results, by the end of Q3, Bamboo Capital had completed 54.7% and 78.6% of its respective revenue and after-tax profit targets for 2024.

Strong financial structure, bright growth outlook for Q4

At the end of Q3, Bamboo Capital's total assets reached VND45.4 trillion ($1.8 billion), up 8.1% from the beginning of the year, bolstered by the merger of Tipharco Pharmaceuticals into its ecosystem.

The group’s equity stood at VND21.3 trillion ($842.23 million) as of September 30, 2024, reflecting a 21.9% increase since the start of the year due to a successful capital raise of VND8 trillion ($316.33 million) via a public share offering in Q2.

Consequently, Bamboo Capital's financial leverage decreased to a safe level, with the debt-to-equity ratio falling from 2.2 at the end of 2022 to 1.1 on September 30. Furthermore, the debt-to-equity ratio dropped to just 0.6, lower than that of its peers in the same industry.

As the economy gradually recovers, the group has actively optimized resources and focused on core business areas. According to the cash flow statement, as of September 30, its net cash from operating activities was negative VND2.74 trillion ($108.34 million), mainly due to investments in the waste-to-energy segment and ongoing real estate projects, including the Malibu Hoi An and King Crown Infinity in Ho Chi Minh City.

This indicated that even amidst market challenges, Bamboo Capital is committed to selective M&A activities and project execution, the group said in a release.

Importantly, the net cash from financing activities turned from negative VND794.2 billion to positive VND2.2 trillion ($86.99 million) at the end of Q3, thanks to funds raised from the public share offering.

It showed that Bamboo Capital is actively enhancing its capital base to support production and business activities while maintaining liquidity at a safe level.

Recently, the government issued the Direct Power Purchase Agreement (DPPA) mechanism and Decree 135/2024/ND-CP, marking a significant step in promoting renewable energy development, particularly rooftop solar, thus providing further impetus for companies like BCG Energy.

Additionally, the real estate market has gone through its most challenging phase, beginning to show positive signals, the release noted.

BCG Land is accelerating the completion of ongoing projects for handovers. In Q4, it plans to offer for sale the remaining units of the King Crown Infinity project, anticipating a surge in revenue from project handovers by year-end.

Overall, Bamboo Capital’s Q3 business performance showed significant positive shifts. With favorable macroeconomic factors and signs of recovery in the market, the group is well-positioned to meet its 2024 business objectives and continue sustainable growth.

In the stock market, BCG closed Friday at VND6,700 ($0.26) per share, up 5.18% from the previous session.