Year-end sales activities of real estate businesses still do not show positive signs, causing profits for the ...
Year-end sales activities of real estate businesses still do not show positive signs, causing profits for the entire industry to decline compared to the same period last year. Currently, except for a few forecasting profitable businesses, the majority of project developers are still struggling to find a sprint to reach the target target.
The deadline is near, but the goal is still far away
Among the group of businesses that completed their third-quarter business results report early, Nam Long Group was considered a positive face when it achieved a profit after tax of nearly 71 billion VND, an increase of 39% over the same period last year despite its revenue being low. reduced by up to 60% with 357 billion VND. The majority of Nam Long's revenue during the period was contributed from selling houses and apartments (accounting for 86% of total revenue).
Some businesses reported modest profits in the third quarter. Illustrative photo: V. Dung
Accumulated for 9 months, Phat Datreported a profit after tax of nearly 400 billion VND... In 2023, the business sets a target of total revenue of 2,800 billion VND and pre-tax profit of 850 billion VND. Thus, after 9 months, the business has completed 63% of its profit plan.
Although some businesses reported early showing positive stories about financial and core business activities, the market has not yet reached the ideal state. It is easy to see that the poor liquidity situation that has persisted since last year is showing that the market's growth momentum is very fragile. Even the basic indicators of real estate transactions in previous quarters were mainly carried by Vinhomes projects.
The real estate market is expected to change more positively in the last quarter of the year when the sales activities of investors are supported by decreasing mortgage interest rates. However, the weak response from the demand side may be a problem that makes many businesses worry about their goal of accelerating growth in the remainder of the year.
Try to keep a balance on debt
The third quarter business reporting season is an important period in determining how a business is headed toward the end of the fiscal year. There are many businesses that have products ready to open for sale during the year-end business season to improve cash flow, but there are also many businesses that have to make efforts to balance their debts, especially bond debt.
Specifically, statistics show that as of mid-October, more than 50 issuers have reached agreements to extend bond terms with bondholders and have officially reported to the Hanoi Stock Exchange. (HNX). The total value of bonds whose term has been extended is more than 95,000 billion VND.
Consumer demand remains weak, and liquidity risks persist, making it very difficult for businesses to 'pick up the pace' in the fourth quarter to reach the planned destination. Illustrative photo: DNCC
The most prominent in bond debt restructuring activities is Novaland. Currently, this business is using many options to pay interest and principal on mature bond lots, including using real estate to swap with bondholders. In fact, since the end of September until now, Novaland has also implemented this method to pay for a number of bond lots with an issued value of more than 1,000 billion VND.
From an objective perspective, Mr. Nguyen Ba Khuong, an expert from VNDirect Securities Company, shared that among the organizations that negotiated to extend debt, many organizations had delayed paying their bond debt many months before. Even if bondholders pressure, businesses will not have the money to pay immediately, because the real estate has not been sold. Both parties "reluctantly" had to sign an extension contract.
Also according to Mr. Khuong, many issuers seek to repay debt with real estate, but very few bondholders accept this type of asset. The main reason is that the real estate assets used for payment are not fully legal, or the price calculated to pay bondholders is not attractive.
Negotiating debt rescheduling, repaying debt with assets, and buying back debt are three basic solutions for businesses to ease the pressure of debt due. Although there is less, the amount of bond debt due and payable is still very large.
The 2023 real estate market has gone more than 2/3 of the way and most of the time is waiting for support policies to seep into practice. Signs of bottoming out appeared in the third quarter but were only "reactions" of a few businesses that had adequate legal supply and met demand. In general, demand is still weak and liquidity risks still persist, so it is difficult for businesses to "open up the pace" in the fourth quarter to reach the destination on schedule.