Taseco Land shareholders concerned as company pledges assets and faces inspection while netting 503 billion VND in 2023

Fresh off the stock exchange, Taseco Land shareholders (Upcom: TAL) received great news as TAL announced a consolidated net profit of VND 503 billion in 2023 despite increasing debts and multiple assets being put up for collateral.

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Taseco Land is mortgaging 906 sales contracts of apartments in Alacarte Ha Long mixed-use commercial service and residential building to VietinBank customers at Thanh Xuan branch.

Positive business results

Taseco Land Joint Stock Company (Taseco Land, UPCoM: TAL) has just released the consolidated financial statements for the fiscal year ending December 31, 2023. Accordingly, Taseco Land recorded revenue of VND 3,238 billion and profit before tax of VND 661 billion, with net profit of over VND 503 billion.

In the fourth quarter of 2023, TAL’s consolidated net sales reached VND 2,550 billion, up 10% compared to the same period last year. Gross profit reached VND 728 billion, up 17%.

In the quarter, financial revenue was VND 28 billion, up 40%. Other income reached VND 56 billion, up 28 times, mainly from trading in cheap goods.

Thanks to that, despite a 16-fold increase in financial costs (reaching VND 60 billion) and a 22% increase in management costs (reaching VND 66 billion), TAL still achieved pre-tax profit of VND 617 billion, up 52%; post-tax profit of VND 476 billion, up 49% compared to the same period last year.

Accumulated in 2023, TAL’s net revenue reached VND 3,238 billion, up 14% compared to the previous year. Revenue structure recorded: real estate segment increased by 10%, reaching VND 2,699 billion; construction segment increased by 19%, reaching VND 309 billion; rental segment increased by 3.5 times, reaching VND 116 billion; service supply segment reached VND 113 billion, up 36%.

Thanks to the increased revenue, gross profit reached VND 881 billion, up 14% compared to the previous year, corresponding to a gross profit margin of 27.2%. TAL ended 2023 with pre-tax profit of VND 661 billion, up 40%, and post-tax profit of VND 503 billion, up 36% compared to the previous year.

In 2023, TAL set a target revenue of VND 3,400 billion and pre-tax profit of VND 641 billion. Thus, the company completed 95% of the revenue target and exceeded the profit target by 3%.

As of December 31, 2023, TAL’s total assets reached VND 10,176 billion, up 30% compared to the beginning of the year. The structure of recorded assets showed an increase in inventories, reaching VND 3,813 billion, up 56%, accounting for 37% of total assets, mainly production and business costs in progress, concentrated in projects: NO1-T6 (VND 116 billion), B3-CC2-A Starlake (VND 710 billion), new urban area project 4 Thanh Hoa city center (VND 1,754 billion), Hai Yen project (VND 612 billion), Nam Thai Nguyen project (VND 382 billion)…

TAL’s receivables also increased by 30% to VND 2,392 billion, accounting for 23.5% of total assets. Short-term receivables provision doubled to VND 19 billion.

Meanwhile, unfinished basic construction costs decreased slightly by 8% to VND 1,856 billion, accounting for 18%, focusing on projects: B2CC4 Tay Ho Tay (VND 623 billion), B3-CC2-B Starlake (VND 537 billion), tourism and service area Quang Binh (VND 264 billion), Lakeview Tower (VND 110 billion), Pulchra Resort Da Nang (VND 202 billion)… In addition, TAL also recognized unfinished production and business costs of VND 316 billion, including projects in the group of houses in Southeast Tô Hữu road.

High pressure of loans

In terms of capital, payable debts as of December 31, 2023 reached VND 6,039 billion, up 49% compared to the beginning of the year. A notable development is the increase in borrowings, reaching VND 3,262 billion, up 2.8 times. Taxes and state payable amounts reached VND 481 billion, up 2.8 times. In contrast, short-term customer payment amount decreased significantly by 88%, to only VND 26 billion.

High borrowings have led to a high financial cost for TAL in 2023, reaching VND 101 billion, up 5.3 times; management costs reached VND 187 billion, up 33%.

TAL’s owner’s equity as of the end of 2023 reached VND 4,137 billion, up 9% compared to the beginning of the year. The debt repayment/equity ratio was 0.78 times.

In terms of cash flow, TAL’s net operating cash flow in 2023 reached minus VND 1,557 billion, due to increased inventory, increased receivables, decreased payables, and corporate income tax.

Investment cash flow also reached minus VND 643 billion, mainly due to increased asset purchases and lending. Therefore, TAL had to offset this by pushing its borrowing scale to increase by 2.3 times compared to the previous year, reaching VND 3,818 billion.

The net cash flow for the whole year was negative, resulting in a year-end cash and cash equivalents of only VND 288 billion, down 38% compared to the beginning of the year.

A series of assets mortgaged, including projects subject to inspection

With high borrowings, TAL’s financial leverage is being stretched as the company is mortgaging a series of assets and property rights related to the implementation of projects , including projects subject to inspection.

At the end of November 2023, TAL mortgaged assets and property rights related to the Nam Thai mixed-use commercial service project (Thai Nguyen) with VietinBank Thanh Xuan branch.

Specifically, TAL mortgages the entire “Right to claim debts, payable amounts, insurance entitlements, compensation amounts, fees that the mortgagor receives in the process of investment, business, project development, profits, revenue from business operations, value exploitation funds for land use rights or assets attached to land (profits) in the Nam Thai mixed-use commercial service project in Nam Tien ward, Pho Yen city, Thai Nguyen province” .

In addition to the project in Thai Nguyen, at the end of November 2023, TAL also mortgaged assets and property rights related to its project in Thanh Hoa to VietinBank Thanh Xuan branch.

Specifically, the mortgage covers the entire “Right to claim debts, payable amounts, insurance entitlements, compensation amounts, fees that the mortgagor receives in the process of investment, business, project development, profits, revenue from business operations, value exploitation funds for land use rights or assets attached to land (profits) in the new urban area project in Hai Yen commune, Tinh Gia district, Thanh Hoa province”

Previously, in June 2023, TAL mortgaged the entire “Right to claim debts, payable amounts, insurance entitlements, compensation amounts, fees that the mortgagor receives in the process of investment, business, project development, profits, revenue from business operations, value exploitation funds for land use rights or assets attached to land (profits) in the new urban area project in Central area of Thanh Hoa city (trade name Central Riverside Thanh Hoa)” for the inspection by Thanh Hoa provincial inspection department.

With mortgaging assets, property rights related to ongoing projects and real estate sales contracts, TAL has also been mortgaging its shares in other companies for banks .

Specifically, in December 2022, TAL also pledged 9,000,000 shares of Công ty CP Đầu tư xây dựng số 4 (stock code: CC4) issued by Công ty cổ phần Đầu tư Bất động sản TASECO and all property rights arising from the above shares to VietinBank Hanoi branch.

Also in December 2022, TAL pledged 11,880,000 shares (valued at VND 118.8 billion) of TAL at Công ty CP Alacarte Hạ Long and all related property rights arising from those shares.