Vietnamese construction company Hoa Binh Construction achieved a record quarterly profit of VND 682 billion or US$26.9 million in the second quarter of 2024, a major turnaround from huge losses in the same period last year.
However, a closer look reveals that most of this profit stemmed from financial activities, not core construction operations. Specifically, the firm booked nearly VND 503 billion or US$19.86 from the liquidation and sale of fixed assets. Additionally, financial revenue doubled year-over-year to US$1.82 million due to the sale of several of its subsidiaries and affiliated companies. Of note, back in June, Hoa Binh announced that it would divest entirely from loss-making affiliated companies.
Despite a record profit in the second quarter, Hoa Binh still has carried an accumulated loss of US$98.72 million, as of June 30. This was in part because the Vietnamese construction industry as a whole is facing headwinds, with developers struggling against tighter credit conditions and a slowdown in the real estate market more broadly.
Furthermore, in the second quarter, Hoa Binh reported sales and service revenue of VND2.16 trillion or US$85.32 million, down 5 percent year-over-year. Additionally, consolidated profit plunged 74 percent compared to last year due to a 10 percent increase in cost of goods sold.
Hoa Binh, trading under ticker HBC, closed at VND 7,900 a share on Friday. Notably, as of July 19, foreign traders held 18.21 percent of the company’s shares with the company sporting a foreign ownership cap of 50 percent.
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