Former property giant could soon say goodbye to real estate

HAGL Group said in its recent 2018 financial report that it plans to divest from HAGL Myanmar, its largest real estate project.

The company now lists real estate as part of its "other activities," and it was not even mentioned in chairman Doan Nguyen Duc’s letter to shareholders. Last year HAGL Group's revenues from real estate were only 1.1 percent at VND58 billion ($2.5 million).

In contrast, in 2008-12, when property was its main business, it earned VND3 trillion ($129 million) a year mostly from projects in Ho Chi Minh City.

But the company began to diversify in the following years.

In 2013 revenues from real estate plummeted to below VND250 billion ($10.7 million) from VND2.8 trillion ($120.7 million) the year before.

In 2014 the company said in a letter to shareholders: "HAGL has restructured the real estate business and has pulled out of Vietnam's property market. We believe that the country’s real estate supply is too large for its absorption ability now and in the near future."

It started moving into agriculture and husbandry. Last year the company invested VND976 billion ($42 million) to buy 5,300 hectares (13,096 acres) of land in Cambodia to grow bananas for export to China where demand is rising rapidly.

Duc said the company has been depending on plants with low ripening times such as bananas, chili and passion fruit to speed up its cash flow cycle.

HAGL expects bananas to contribute 73.3 percent of its revenues this year of VND4.8 trillion ($205.9 million).

Its agriculture subsidiary, HAGL Agrico, last year reported revenues of VND3.69 trillion ($159 million) and losses of VND659 billion ($28 million) compared to a profit of VND527 billion ($22.7 million) in 2017.