Hoà Bình Construction Group Joint Stock Company (coded HBC-HOSE) announces its explanation for the reviewed and unreviewed semi-annual financial statements for 2024.
Accordingly, HBC has just announced its reviewed consolidated financial statements for the first six months of 2024 with revenue of VND 3,812 billion, up 11% over the same period last year.
After-tax profit reached nearly VND 830 billion, while the same period last year recorded a loss of VND 713 billion. Compared to the self-prepared financial statements, the after-tax profit increased by VND 88.76 billion.
As of June 30, 2024, the Group had accumulated losses of VND 2,403 billion (December 31, 2023: VND 3,240 billion) and some overdue debts. In addition, the real estate market continued to be affected by many adverse events in Vietnam and around the world, and the liquidity of real estate investors decreased significantly, which had a significant impact on the business results and debt repayment cash flow of the Group.
These signs indicate the existence of significant uncertainties that may cast significant doubt on the Group’s ability to continue operating. However, the mid-year separate financial statements for the six-month financial period ended June 30, 2024, were still prepared by the Board of Directors on a going concern basis for the following reasons:
HBC has issued additional shares to pay off debts. On June 28, 2024, the enterprise announced the results of the issuance of shares to swap debts with a total volume of more than 73 million shares, helping to increase its charter capital by more than VND 730 billion.
In terms of business plans, this year, the Group’s business strategy is to continue to promote the expansion of domestic and foreign markets. In the US, the company started the construction of The Grove Apartments project in California in April 2024 and will soon implement two large infrastructure projects in Cambodia.
In addition, HBC also cooperates with many domestic investors to implement renovation projects of apartment buildings and urban areas in many provinces and cities such as Ho Chi Minh City, Hanoi, Hai Phong, Vinh Phuc, Bac Giang, Quang Nam, Da Nang, Binh Thuan, Dong Nai, etc.
HBC also plans to continue promoting the collection of accounts receivable, especially overdue receivables, by effective measures including dispute resolution through courts and arbitration. The collection of debts from projects implemented in the next 12 months and projects carried out in previous years is expected to bring significant cash flow to serve business activities and debt payment.
“The Board of Directors of HBC also expects that the Government will continue to have policies to remove difficulties for the real estate market, and the State Bank will soon approve the extension of the application period for the policy on debt rescheduling and debt classification to support enterprises in difficulty. The company will soon reach agreements on the restructuring of debts coming due, and credit for new loans at credit institutions to meet working capital needs,” HBC stated.
Based on the above plans, the Board of Directors of HBC evaluates and believes that the enterprise will have enough working capital for business activities and cash flow to meet obligations due within the next 12 months.
It is known that in 2024, Hoa Binh Construction sets a plan with a total revenue of VND 10,800 billion and a profit after tax of VND 433 billion. Thus, by the end of the first half of 2024, Hoa Binh Construction has completed 192% of the year plan.
Previously, HOSE announced the decision to forcibly delist more than 347.2 million HBC shares. The delisting takes effect on September 6, and the last trading date on HOSE is September 5. After that, the shares will be registered for trading on UPCoM.
The reason for the compulsory delisting is that Hoa Binh Construction has a total accumulated loss exceeding the contributed charter capital according to the audited financial statements for the year 2023, which falls under the case of compulsory delisting under Point 3, Clause 1, Article 120 of Decree 155/2020/ND-CP dated December 31, 2020.
Although HBC shares are about to be delisted, on August 26, the Chairman’s brother, Mr. Le Viet Hung, announced that he had successfully purchased 500,000 HBC shares. After this transaction, Mr. Hung’s holdings increased to nearly 1.4 million shares, holding 0.39% of the capital in HBC.
In the market, after falling to the lowest level in a year at VND 4,630/share (August 12), HBC price has recovered and is currently trading at VND 5,180/share.
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