Most
property companies saw their profits last year declining almost to nil compared
to the previous year as the gloomy market continued to adversely affect their
operations.
A sharp revenue drop and a build-up of unsold
products caused by weak demand in the apartment segment coupled with rising
borrowing costs have led to the poor business results of realty firms.
The market leader Hoang Anh Gia Lai saw its
profit plunge by 89% year-on-year, from 2.08 trillion dong in 2010 to 224
billion dong last year. The group explained its subsidiaries no longer enjoy
profits generated by the parent firm as the latter is now only in charge of
management.
Sai Gon Thuong Tin Real Estate Company, better
known as Sacomreal, recorded a loss of nearly 40 billion dong in the final
quarter of last year. The firm’s revenue from product sales and services in
2011 halved to 540 billion dong from 1.09 trillion dong in 2010.
Sacomreal’s profit was dragged down 83% to a
mere 80 billion dong last year, against 485.5 billion dong in 2010.
Phat Dat Property Development Corporation was
faring no better. The company in its financial statement reported its 2011
revenue totaled a mere 127 billion dong, a drop of 92% from 1.57 trillion dong
in the year before. The company’s profit also dipped to 4.5 billion dong,
equivalent to some 1% of the level of 331 billion dong in 2010.
With the loss of over 225 million dong
recorded in the last quarter of 2011, the year’s profit of House Vietnam Joint
Stock Company dwindled by 96% against the previous year. Similarly, Dat Xanh
Real Estate Service and Construction Corporation witnessed its profit decline
by a half due to the loss of over 16.5 billion dong in the last quarter.
The business results of ten property companies
gathered by Saigon Times Daily show that the combined profits of all ten huge
firms in 2011 are still lower than the profit of Sacomreal alone in 2010 and
far behind the profit of Hoang Anh Gia Lai in the same year.
Most realty firms ascribed their dismal
profits to the continued difficulties faced by the market and poor sales of
products, while financial costs, specifically interest rates, put more pressure
on many enterprises.
For instance, Thu Duc Housing Development
Corporation (Thuduc House) had to pay an interest sum of 49 billion dong last
year, a significant rise from 11 billion dong in 2010. Sacomreal had some 249.5
billion dong in loan interest payables in 2011, or an increase of 10%
year-on-year.
Pressure of loan repayment, along with
stagnant trade, has forced several property enterprises to discount their
products in order to rev up demand as well as quickly recover capital to
withdraw from the market.
Most real estate companies are now debtors to
the banks. Therefore, to boost product sales to pay their debts is currently a
big challenge to property enterprises.
In the outlook for the local property market
this year, the analysts of VietCapital Securities predicted 2012 would be
another tough year for the market given the liquidity crisis and property
lending restrictions.
Market observers forecast the trend of project
transfer would continue in 2012, and the market would hardly prosper as real
estate credit is still tightened.
Saigon Times
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