On April 25, 2024, No Va Real Estate Investment Corporation (HoSE: NVL, “Novaland”) organized the 2024 Annual General Meeting of Shareholders.
In the report at the meeting, the Board of Directors stated that at the end of the 2023 financial year, despite facing many difficulties, Novaland recorded a total consolidated net revenue of nearly VND 4.757 billion and a consolidated profit after tax of nearly VND 486 billion.
The total consolidated net revenue includes revenue from sales of goods and revenue from the provision of services. Of which, net revenue from sales of goods reached nearly VND 4.090 billion, recognized from handover of projects such as NovaWorld Phan Thiet, NovaWorld Ho Tram, Aqua City, Palm City, Lakeview City, Saigon Royal, and other downtown real estate projects; revenue from the provision of services reached VND 667 billion.
The lower revenue compared to the target Novaland presented to the General Meeting of Shareholders in June 2023 is due to a reduction in real estate transfer revenue because of declining market confidence and the length of time needed for recovery as before. On the other hand, profit after tax exceeded the set target mainly due to the company’s efforts to restructure its debt, optimize operating costs, and engage in financial activities during the restructuring phase.
As of December 31, 2023, Novaland’s unbooked revenue reached nearly VND 240 trillion from projects where Novaland is the investor and is currently in the development phase.
An overview of the Novaland shareholder meeting.
The management also reported several positive results from the debt and bond restructuring, including the company reducing debt by approximately VND 7.156 trillion compared to 2022, reaching an agreement on the restructuring plan for convertible bonds with a total value of $300 million, and reaching a total of over VND 9,200 billion in principle payment extensions for domestic bonds pursuant to Decree 08/2023/ND-CP.
Notably, the company completed a bond swap transaction with a total value of VND 2,346 billion for a portion of the equity in a project. In addition, the company also succeeded in negotiating bond swaps and product debt with a total value of approximately VND 2,500 billion.
As for the 2024 plan, Novaland presented the General Meeting of Shareholders with a target of VND 32,587 billion in consolidated revenue and VND 1,079 billion in profit after tax. For its capital in 2024, the company plans to raise VND 16,000 billion from financial institutions for project development and business operations. Recently, on April 22, 2024, Novaland presented the Board of Directors with a plan to issue shares worth over VND 11,700 billion to existing shareholders. The offering period is expected to be in the second quarter of 2024, after the State Securities Commission issues a certificate of registration for a public offering of shares as prescribed.
In parallel, putting emphasis on Environmental, Social, and Governance (ESG) goals toward developing a sustainable real estate ecosystem, Novaland has been and is currently improving its corporate governance model to maintain strict compliance throughout the Group and minimize risk. Novaland’s governance model is structured to achieve the goals of clear decentralization, minimizing duplication, and emphasizing the competence of management personnel.
With the support and assistance of the Government and local authorities in promoting the legal clearance of projects, Novaland is making efforts to raise funds from various sources to continue vigorously implementing construction activities, completing products, and developing projects for handover to customers. The company is also considering and negotiating with several potential strategic partners on the transfer of certain projects in order to restructure its debts and improve its investment portfolio in the most effective way.
This year, revenue-generating projects such as Aqua City, NovaWorld Phan Thiet, NovaWorld Ho Tram, and housing projects in Ho Chi Minh City will be the focus of development plans and activities to create destinations, such as investments in amusement parks & resort accommodations, thereby attracting a large number of residents and tourists and generating specific financial results for stakeholders, while also contributing to the development of local tourism. Construction of these projects was restarted in the second quarter of 2023 and is expected to introduce new products to the market from the fourth quarter of 2024.
At the meeting, Mr. Bui Thanh Nhon, Chairman of the Board of Directors of Novaland Group, shared: “To date, Novaland has essentially completed the restructuring of our domestic and international debts and bonds. The company’s assets remain balanced with debt. In the coming period, the Group will continue to restructure its finances and resources, meticulously complete legal requirements, change strategy, focus on core business, streamline its structure, and participate in the ESG action plan.”
Speaking at the meeting, Mr. Dennis Ng Teck Yow, General Director of Novaland, also stated that Novaland will continue to develop the essential ecosystems that provide infrastructure for new tourist destination urban areas in its long-term development strategy. Novaland is committed to only developing effective projects that are in line with community development and local development. The Group is gradually implementing its roadmap in accordance with the ESG focus on sustainable development.
FAQ
Shareholder: Could the Board of Directors please provide us with information on Novaland’s plans for reconstructing its projects? Where will the funds come from, and is there a guarantee that the projects will be built and handed over to customers?
Novaland General Director Dennis Ng Teck Yow: The Grand Manhattan project has resumed construction since April 2023 with support from TPBank. The project has now completed the handover of the resettlement area, and the remaining portion has been topped off.
In addition, we are also rapidly rebuilding several projects, specifically the Hanaba Island and Wonderland subdivisions in NovaWorld Ho Tram. A portion of NovaWorld Phan Thiet is also being funded by the Military Bank (MB) since May 2023.
Projects in downtown Ho Chi Minh City are also being rebuilt, such as Victoria Village and Sunrise Riverside. The Aqua City project is also expected to see the continued construction of several subdivisions with capital support from VPBank.
The company is currently making every effort to negotiate and continue working with domestic banks and contractors to maintain project development activities, ensuring progress in the handover of each phase to homebuyers. For other projects/subdivisions that are also part of the company’s plan, banks are reviewing and will provide ongoing funding in the near future.
Shareholder: The company recently announced a plan to offer 11,700 billion shares to existing shareholders. Could this lead to share dilution and a decrease in the value of shares currently being traded on the stock exchange? What is the company’s opinion on this matter?
Mr. Duong Van Bac, CFO of Novaland Group: Compared to before the crisis, the price of NVL shares has decreased by 80-90%. This is a significant drop for a stock on the market and reflects the difficulties the company has faced in recent times. At present, the overall situation of the company has seen more positive developments compared to the end of 2022 and the beginning of 2023, as the company’s management previously shared. On the restructuring roadmap, raising new capital is fundamental for the Group to secure additional financial resources, helping the Group to steadily overcome the crisis and accelerate the recovery of business activities.
Currently, we would also like to share with our shareholders that several major partners are interested in investing in the company through private placements because they believe in the Group’s current foundation, recovery potential, and future growth. In fact, in the recent international convertible bond structure, investors agreed to a conversion price of VND 40,000 per share, nearly three times the current price. However, in the near term, the Group’s management is prioritizing the right to purchase for existing shareholders at a price lower than the market value. This is also a way to protect the interests of existing shareholders, who have accompanied and stood by the company throughout this period
