LCG Annual General Shareholder Meeting: Establishing Three Main Pillars

AGM LCG was held on the morning of April 27, 2024

In 2024, LCG sets revenue target of VND 2,400 billion, an increase of 20%. After-tax profit reaches VND 131 billion, an increase of 30%. According to the 2024 plan, construction activities will be the main focus in the company’s revenue structure. A representative of the company’s Board of Directors said that the estimated results for the first quarter, revenue reached VND 310 billion and after-tax profit reached VND 14.5 billion. With the projects in progress, the company is confident that it will complete or exceed its plan for 2024.

At the conference, Chairman of BOD Bui Duong Hung shared that LCG has been operating in the transportation infrastructure sector for exactly 10 years, with the first project being the expansion of National Highway 1A with an investment of only VND 135 billion. Up to now, the company is implementing projects with a total investment of VND 7,000 billion, becoming a major player in the industry, participating in 6 out of which 5 are national key projects and 1 provincial key project.

During the years of involvement in transport infrastructure, the BOD realized that this is an irreversible trend in a developing country. The leadership determined that participating in transport infrastructure is difficult, but the products created must be top-notch. Therefore, LCG invested in the most modern equipment from 2015 to 2016 (mostly from Germany and Japan), which has now depreciated by 60% but still has a market value of 80%. At the same time, the company also invested in its human resources, upgrading its staff.

“In my career in transport infrastructure, there has never been a time when it is as rewarding to spend as much money as it is now,” Mr. Hung said about the operating conditions of the industry. On the other hand, leaders of the Ministry of Transport also shared that the current time is also a historical moment for the transport industry, where during bidding, contractors compete with each other but join hands to overcome difficulties.

Regarding construction activities, 2024 is expected to be a breakthrough year to achieve the targets set for the period 2021-2025. The main revenue contribution is focused on transportation and electrical construction projects, with a value of VND 2,274 billion, accounting for 95% of the plan for the year.

In 2024, the company will continue to implement major transportation projects such as Van Phong – Nha Trang Expressway, Vung Ang – Bung, Road 4 Hung Yen, Tan Phuc – Vong Phan and Bien Hoa Vung Tau.

In the renewable energy sector, the company is set to stop the second phase of Chu Ngoc Solar Power Plant 25 MWp, transferring VND 125 billion of investment to the Huu Nghi – Chi Lang Expressway project.

Regarding wind power projects, the two projects in Thang Hung and Dinh Lap are still awaiting the electricity price purchase and sale framework for renewable energy issued by EVN while the bidding mechanism to select the lead investor of the electricity project and electricity law are being submitted by the government to the National Assembly for approval.

In addition, wind power projects such as Ia Tor, Licogi 16 Quang Tri, Licogi Huong Hoa 2 are also considered for investment suspension, pending more favorable opportunities in the future.

Revenue from real estate in 2024 is expected to contribute a small amount to the overall structure, around VND 26 billion. LCG will assign tasks for each specific real estate project as follows:

Long Tan 77ha project, Nhon Trach, Dong Nai: Granting Certificates for land plots in the 2019 revised planning. Prepare to review design documents and invest in items such as wastewater treatment plants and social infrastructure works according to the approved plan.

Nam Phuong City Project, Bao Loc City, Lam Dong: Completing the construction of raw houses for the 13.3 ha area and land compensation and clearance for the 3.4 ha area.

Hiep Thanh Residential Area Project, District 12, Ho Chi Minh City: Completing the granting of Certificates of land use rights to all customers. Investing in the remaining technical infrastructure of the project (asphalt layer 2 – sidewalk – trees).

At the same time, implementing legal procedures for new projects in localities such as Ninh Thuan, Thanh Hoa, Lam Dong to be included in the business development plan for the period up to 2025.

Three-pillar orientation

Looking ahead to 2025, the company will focus on developing three key areas: transportation infrastructure, real estate, and renewable energy with the dual goal of generating effective returns from investment activities and creating jobs related to construction activities from investment projects.

Among them, the transportation infrastructure sector is LCG‘s core and central focus. Aside from being competitive in bidding for public investment projects, LCG will expand its investment in PPP and large-scale private projects. The average annual revenue target in this sector is over VND 2,000 billion.

In the real estate sector, for the existing land fund, the company will complete legal procedures to continue putting it into operation. At the same time, continue to research and propose investment in real estate projects in areas with potential in various regions. At a time when the real estate market is in a downturn, the company accumulates land and evaluates and proposes potential projects to make proposal documents, supplement planning, establish project FS, acquire land fund, clear land, and prepare steps to invest in project construction.

Regarding renewable energy, while waiting for specific government policies relating to the new price policy of renewable energy projects, based on Lizen’s existing projects (wind power projects), cooperation will be established with foreign organizations with technical and financial experience to take steps in the preparation phase with the goal of being ready to implement project construction and investment at the right time.

Why was the 2023 plan not completed?

In 2023, the company’s revenue reached VND 2,007 billion, 70% of the plan, equivalent to 200% of 2022 revenue. Profit reached VND 101 billion, 67% of the plan, down 48% compared to the previous year.

During the year, construction activities were still the core activities that generated the main source of work and revenue for LCG. Transportation infrastructure projects accounted for a high proportion of revenue, including Nghi Son Highway 45, Van Phong – Nha Trang Expressway, Vung Ang – Bung, with total revenue reaching VND 1,382 billion out of a total of VND 1,785 billion of construction revenue.