Novaland in its fourth quarter 2023 financial report showed a surprising business result: while its turnover decreased, profit unexpectedly soared to a 3-year high.

The real estate firm owned by billionaire Bui Thanh Nhon reported post-tax profit of VND1.64 trillion, or 13 times higher than that of the same period 2022.  However, its profit was just VND685 billion in 2023, much lower than the VND2.181 trillion the year before.

The fact that Novaland made a high profit in the fourth quarter 2023, helping raise the total profit of 2023, was a big surprise, because the real estate market remained quiet.

Novaland’s financial report shows that its revenue in the fourth quarter was VND2.031 trillion, lower than the VND3.243 trillion of the same period last year.

Novaland’s CEO Dennis Ng Tech Yow said profit increased in the fourth quarter thanks to financial investments.

The company had total revenue of VND4.772 trillion in 2023, much lower than the VND11.151 trillion in 2022. Most of the company’s revenue came from real estate transfer deals. 

Novaland has delivered products to NovaWorld Phan Thiet, NovaWorld Ho Tram, Aqua City, Palm City, Lakeview City, Saigon Royal and other central real estate projects. 

However, the profit from financial activities in 2023 increased, while sales costs decreased sharply.

The revenue from financial activities increased by 15 percent to VND5.741 trillion, which came from business cooperation contracts and divestment deals.

Novaland’s financial situation has improved, but there are still risks. It remains a large real estate firm with total assets reaching VND241 trillion as of the end of 2023, a slight decrease of 6 percent compared with the year before.

The inventory assets are valued at VND138.6 trillion, including VND130 trillion worth of land banks and projects under construction. The remaining is completed real estate products to be delivered to clients.

By the end of 2023, Novaland owed VND57.7 trillion in loans, a decrease of VND7 trillion compared with late 2022. The bond outstanding value had reduced by VND6 trillion to VND38.6 trillion, and bank outstanding loans to VND9.4 trillion.

In the fourth quarter 2023, Novaland continued to gear up with financial restructuring. In mid-December 2023, Novaland released an announcement about restructuring of a international convertible bond package worth $300 million, which helped ease financial pressure on the firm.

The news about Vinhomes, owned by dollar billionaire Pham Nhat Vuong, also surprised investors. The realtor reported post-tax profit of VND33.3 trillion, up 14 percent over the same period last year.

Vinhome reported net consolidated revenue of VND121.4 trillion, up 49 percent over 2022 after delivering 9,800 real estate products belonging to Vinhomes Ocean Park 2 and 3.

The real estate firm also witnessed total assets increase by 24 percent to VND447 trillion dong and stockholder equity by 23 percent to VND182 trillion as of the end of 2023.

Meanwhile, the majority of other real estate firms are sliding. KhaiHoan Land reported profit of minus VND44 billion from its core business – real estate – in the fourth quarter 2023. However, the company did not take a loss last year thanks to a profit of VND7 billion from an investment item.

In the fourth quarter 2023, Khai Hoan Land saw net revenue drop by 95 percent compared with the same period 2022 to VND31 billion. The revenue from its real estate brokerage service dropped dramatically which affected Khai Hoan’s business results. The revenue from real estate contract transfers dropped by 99 percent to VND1.3 billion.

In 2023, Khai Hoan’s revenue dropped by 76 percent to VND330 billion, while post-tax profit fell by 72 percent to VND124 billion, the lowest profit level in the last three years.

KhaiHoan’s total assets decreased slightly and inventories fell by 54 percent to VND210 billion. But the company has big account receivables of VND6 trillion.

Cen Land (CRE) in the fourth quarter 2023 once again made a profit, but it was modest, just VND1 billion.

Manh Ha