Construction giant Hoa Binh says 2020 most difficult year ever

The pandemic has hindered progress of all its projects because the group was unable to mobilize the needed construction workforce, Le Viet Hai said Monday at the annual shareholders meeting.

The risk of coronavirus transmission prompted many projects to suspend construction, and the surging construction material prices also added to its struggle, he said.

Its stock price even slipped 42 percent from the beginning of the year to just VND6,000 ($0.26) per share late March, showing that investors didn't have confidence in the group's ability to overcome the crises caused by the pandemic, Hai said.

Its revenue last year dropped 40 percent to VND11.2 trillion, and post-tax profit was down 83 percent to VND70 billion.

In order to overcome its difficulties, the group has restructured its financial and human resources, as also changed its business model. It has also stocked construction materials to mitigate possible losses resulting from rising material prices

It plans to divest from several real estate projects to earn VND500-800 billion this year. Its four major real estate projects in HCMC, which are under construction, are expected to bring over VND1 trillion in revenue.

It also plans to divest from its subsidiary, brokerage Golden Lotus Securities Corporation, to earn VND30 billion. Its furniture manufacturing firm Interhouse LA Corporation will acquire wood furniture maker Moc Hoa Binh Manufacturing and Decorating Company. Both firms are Hoa Binh Construction Group’s subsidiaries.

It has set a target of VND13.5 trillion in revenue this year, up 20 percent year-on-year. Post-tax profit for 2021 is targeted at VND235 billion, 2.8 times higher than 2020.

It plans to issue corporate bonds, convertible bonds and shares to raise VND2 trillion to fund its business, but the issue date has not been decided.