Intresco’s 2024 Annual General Meeting of Shareholders was held on the morning of April 24 in District 1, Ho Chi Minh City
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Sabinco Residential Area Project Cannot Be Implemented Yet
On the morning of April 24, Intresco Joint Stock Company for Investment and Business in Housing (Intresco, HOSE: ITC) held its 2024 Annual General Meeting of Shareholders. Responding to shareholders’ questions about the implementation status of the Terra Flora project in Dong Nai, General Director Truong Minh Thuan said that this project ITC (contributing 85% of capital) joint venture with Thai Duong Company (15%) and the land use fee has been fully paid.
The project has 4 apartment buildings, 2 office buildings and 1 hotel. To date, the Company has implemented 2 apartment buildings and is implementing an office building.
According to Mr. Thuan, the project is facing difficulties in the fire prevention and firefighting issue despite having been approved before. The fire prevention and firefighting costs have increased 6 or 7 times, so ITC is working with the authorities to reduce these costs to only 1.5 or 2 times, otherwise the project will continue to lose money. To date, the project cannot be invested anymore and must be suspended to complete the procedures.
Regarding the Sabinco project, ITC has paid land use fees since 2018, six years ago. At that time, the Company calculated that if the payment was made in 2018, the project would be implemented in 2019, but it is still impossible to implement it.
According to the leaders, there are two problems that have stuck. Firstly, the case of Company 3/2 in 2018 had a negative impact, causing the projects in the entire Binh Duong province to be suspended at that time. Secondly, about the 2 hectares of land interspersed in the project. The Company has submitted this issue to the Ministry of Natural Resources and Environment, and the Ministry has sent a document to Binh Duong province requesting this land be transferred to ITC and the payment be calculated at market price, but it has not been implemented yet. The Department of Natural Resources & Environment then transferred it to Thu Dau Mot City, but after 4 years, the price of this 2-hectare interspersed land could not be determined. Therefore, the Company cannot issue infrastructure licenses to implement the project.
The leaders of Binh Duong province recently proposed separating 2 hectares of public land for ITC to continue the project, but according to Mr. Thuan, Binh Duong province has not yet calculated the price for a project with public land and how much it would be.
Therefore, Mr. Thuan could not answer the shareholders when the project would be implemented. “The Company has paid for 6 years, during which time it has had to pay interest every year, which is very stressful, but to date the project has not been implemented. So now I don’t know what to do,” explained the General Director.
Continuing to Promote Investment in the Hotel Sector
During the real estate downturn, hotel services have become the main source of revenue for ITC in the past two years, bringing in VND 322 billion last year, accounting for more than 60% of total revenue. This rate has increased from 30% in 2022, partly due to the “loss of revenue” from real estate.
The General Director admitted that ITC was participating in this field for the first time, so it encountered many difficulties due to lack of experience in hotel management, and had to learn by doing.
Initially, the Company planned to cooperate with a foreign hotel management unit, but when negotiating, the costs were too high. ITC could not afford it, so it established a company to manage the hotel itself.
“Up to now, it can be said that La Vela is the No. 1 hotel in Ho Chi Minh City in terms of occupancy rate. The hotel is always in a state of occupancy rate of over 95%, and may even reach 100% from now until the end of the year due to advance bookings. Recently, the Ho Chi Minh City Department of Tourism has rated La Vela as the No. 1 hotel in this regard,” said the leader of ITC confidently.
Chairman of the Board of Directors Nguyen Manh said that the company will definitely continue to implement new projects in the hotel sector in the coming time.
Regarding electronic games for foreigners in hotels, ITC also has no experience in managing this type of business despite its high profitability, so it has cooperated with a subsidiary of a Japanese corporation. However, the recent Decree 121 no longer allows the leasing of licenses to operate this business, so the Company is negotiating with the partner for a new solution.
Project 6A Continues to Be a “Hot” Topic
Project 6A was mentioned by some shareholders at this year’s general meeting, although the leaders of ITC had proactively “fenced” off that only issues related to the meeting agenda should be discussed.
One shareholder wanted the leaders of ITC to clarify why the Company filed a lawsuit against those who bought land in Project 6A 20 years ago, despite the fact that they have not yet received the land. And what happened to the money the Company received from customers 20 years ago.
“I am 65 years old this year, and I have done a lot of business, but this is really strange. I have never seen a seller sue the buyer,” said the shareholder.
In addition, the shareholder also mentioned that the contract between himself and ITC had been transferred to Van Thinh Phat Company.
Chief Accountant Doan Huu Chi said that Project 6A was previously funded by the Company using capital mobilized from its staff, but during the project implementation process, there were problems with compensation and the resettlement process that could not be completed, with about 70 households refusing to leave. Although ITC had asked the People’s Committee of Binh Chanh District to establish a Compensation and Site Clearance Board to count, value and arbitrate, the residents ultimately refused, so the project was delayed.
Project 6A is still recognized on the audited financial statements of ITC in 2023. Source: ITC
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Project 6A initially raised capital and the contributors would later receive land, but the original agreement did not include any compensation for the customers in case the project could not be implemented, which led to the disputes. Some customers also sued ITC, demanding compensation.
According to Mr. Chi, the entire amount of money that the Company previously received from its staff for the project has been used for compensation and resettlement, and land use fees as announced by the State. ITC has even spent more than the amount collected from its staff.
The General Director said that he is waiting for the Prime Minister’s decision to see if the project can continue to be implemented, so if asked when, he cannot answer. In 2021, the Government Inspectorate proposed that the Prime Minister request the Ho Chi Minh City People’s Committee to withdraw this project. The Company has also sent documents to the Inspectorate and the Prime Minister many times, but to date is still waiting to see if the project can be continued.
Revenue from Hotel Services to Account for 50% in 2024
In 2024, the leaders of ITC assessed that the overall economic situation and the real estate sector in particular will still be affected by world politics and monetary policy.
Accordingly, the Company sets a revenue target of VND 615 billion, an increase of 6% compared to last year’s achievement. Of which, half will come from the hotel services
