Viettel Construction assessed that the year 2024 will continue to be challenging, but the corporation believes that with policies to attract foreign investment, remove obstacles for the real estate sector, and the Ministry of Transport approving Viettel to implement submarine cable lines along the North-South Expressway, along with an increase in the baseline salary and the expected recovery of the retail market, it will bring favorable opportunities for Viettel Construction to continue to make breakthroughs.
In the first quarter of 2024, Viettel Construction implemented many important projects such as passing a project to invest in 5,000 BTS stations; signing a contract to operate and exploit telecommunications for Viettel for VND 15,850 billion; and issuing a sustainable development report in accordance with international standards.
Regarding business results, Viettel Construction achieved an estimated VND 2,623.5 billion in revenue in the first quarter of 2024, an 11% increase compared to the same period in 2023, and fulfilled 21% of the 2024 plan. Profit before tax is estimated at VND 144.3 billion, a 6% increase compared to the first quarter of 2023, and 21% of the 2024 profit plan.
Previously, Viettel Construction had a positive year in 2023 with revenue of VND 11,399 billion, a 20% growth compared to 2022 and exceeding the set plan by 10%. Profit after tax is estimated to reach nearly VND 516 billion, a 13.3% growth compared to 2022 and 6% higher than the full-year target. This is the highest profit margin for Viettel Construction since its operation.
From 2019 to 2023, Viettel Construction achieved a compound annual growth rate of 22% in revenue and 33.5% in profit. Business activities of Viettel Construction grew in all sectors, including: construction sector grew up to 47%; infrastructure investment and leasing grew by 39%; operation and exploitation grew by 13%.
With the achieved results, Viettel Construction shareholders passed a plan to distribute cash dividends at a rate of 27.2%. Regarding the 2024 profit distribution plan, Viettel Construction plans to issue 10-20% in dividends.
During the discussion, shareholders raised many questions that were answered by Viettel Construction’s leaders:
Business plan, situation of 2 major projects and 2026-30 plan?
Mr. Pham Dinh Truong, General Director of Viettel Construction, said that the business targets were set by the corporation on the principle of prudence with the goal of surpassing the target. This year, Viettel Construction has not increased capital, but the business results are expected to increase, so the basic earnings per share (EPS) will still increase.
Regarding the situation of the 500kV transmission line phase 3 extension project, Mr. Truong said that Viettel Construction has no experience in industrial electricity so it will act as a subcontractor, with revenue of about VND 15 billion. For the optical cable project for the North-South Expressway, Viettel Construction will participate in a consortium with HBO Telecommunications JSC, with expected revenue of about VND 30 billion.
Regarding the 5-year plan for 2026-30, Viettel Construction aims for double-digit revenue growth, with a minimum of 10% per year. Integrated solutions, construction, and infrastructure investment sectors are all expected to grow. Of which, the infrastructure leasing sector will grow strongly due to the benefit of 5G coverage.
Chairman of the Board of Directors, Do Manh Hung, said that when 5G is fully deployed, Viettel Construction’s infrastructure will be a huge asset, creating high value. The corporation strives to achieve 30,000-50,000 BTS stations in the next 5 years.
Why promote foreign markets?
The General Director of Viettel Construction stated that this is a long-term strategic move to ensure sustainable development. The domestic telecommunications market is almost saturated. In fact, Viettel’s (the parent group) overseas revenue has grown strongly in recent years due to its investment in foreign markets.
Viettel has experience in investing abroad, with many successful models and has ensured efficiency. Viettel Construction will expand its foreign market step by step and carefully assess economic efficiency to decide whether to develop as investment or expenditure.
About TowerCo and co-use rate?
Mr. Pham Dinh Truong said that the Ministry of Information and Communications encourages enterprises to share infrastructure, with Viettel being the pioneer in this effort. Viettel Construction’s station sharing rate will continue to increase, from 1.03 in 2023 to 1.05 in 2025, or 1.1 if possible.
Viettel Construction’s General Director also affirmed that the number one market share in TowerCo with the largest network of stations in Vietnam is the corporation’s advantage. The trend for network operators in the future will be to rent and share new locations. Currently, the two network operators Vinaphone and MobiFone are the main customers renting stations from Viettel Construction.
In terms of efficiency, Mr. Truong said that the rental price depends on the capital expenditure (Capex). When the investment in the station is high, the price is high, and vice versa. Regarding density, the General Director of Viettel Construction said that the corporation’s stations are distributed in all regions, including plains and mountainous areas. “From 2G to 3G, or from 4G to 5G, the higher the G, the shorter the distance between the station locations,” said Mr. Truong.
About capital increase, dividends and fund withdrawal?
Chairman of the Board of Directors, Do Manh Hung, affirmed that Viettel Construction will definitely increase its capital in the near future, possibly in 2025. However, the specific plan is still pending and will be submitted to shareholders later.
Mr. Hung said that Viettel Construction is studying to develop a 5-year strategy, with a goal of growing by at least double digits, a minimum of 10%. The growth drivers are the existing sectors of construction, solutions, operations, and infrastructure investment. The corporation also sees the opportunity in the next 5 or even 10 years to be the story of 5G. Therefore, Viettel Construction has determined that this is a challenging but exciting time for the corporation to realize its sustainable development goals.
The Chairman of Viettel Construction also affirmed that the corporation’s fund withdrawal complies with government regulations. In 2023, an additional development investment fund (15%) was proposed, and the welfare bonus fund was increased from 15-25%. The management team has carefully considered all options to ensure a balance of interests between employees and shareholders.
Regarding finding foreign partners?
Chairman of the Board of Directors Do Manh Hung said that Viettel’s development of 5G infrastructure is an opportunity for Viettel Construction to grow in the next 5-10 years. Viettel Construction is always ready to find domestic and foreign partners with potential and experience to learn advanced models and develop together sustainably.
