Sharp rises in Q2 corporate earnings come from asset sales

Posted on 25 July 2019
 

Source: Viet Nam News

A number of listed companies have reported sharp increases in their quarterly profits as they have performed well in selling stakes in sub-units and projects.

The first half of the year was a tough time for local firms as the Vietnamese economy growth slowed to 6.71 per cent.

The figure was 0.02 percentage point lower than that recorded in the first half of 2018 amid the rising trade tension between the US and China as well as the slowdown of the global economy.

Therefore, the second-quarter earnings season was predicted to be not as good as it was in previous years for listed companies, according to securities firms.

However, some companies managed to swim against the current. Their quarterly earnings recorded extraordinary improvements thanks to the sale of their assets and stakes in member companies and projects.

The sale of its 60 per cent stake in Vĩnh Hảo 6 Solar Power project is expected to bring construction and realty firm Fecon’s revenue in the second quarter up 30 per cent year on year to VNĐ715.5 billion (US$30.7 million).

The value of the deal was estimated at VNĐ45 billion. Fecon’s post-tax profit was forecast to rise 2.4 times yearly to VNĐ150.3 billion in the past quarter.

Property developer Đất Xanh has recently released its second-quarter financial report, which shows the firm’s revenue rose 10 per cent to VNĐ842.4 billion and post-tax profit shot up 100 per cent to VNĐ249 billion.

The company’s quarterly financial report also stated that it sold stakes in its investment projects for nearly VNĐ220 billion in the second quarter.

Steelmaker Nam Kim has estimated a VNĐ120 billion profit for the second quarter of 2019, which is an improvement from the previous two quarters.

The company recorded a loss of VNĐ173 billion in the fourth quarter of 2018 and of VNĐ102 billion in the January-March period of 2019.

After the first two quarters of 2019, Nam Kim estimated its net profit was VNĐ20-25 billion, down 80 per cent year on year.

As the average price of hot-rolled coil on global markets in the second quarter increased modestly to $557 per tonne from $548 per tonne in the first quarter, the company managed to sell its entire ownership in two sub companies and one land use licence.

Before the deals were pulled off, Nam Kim held 100 per cent stake in Nam Kim Corea, which had charter capital of VNĐ91.45 billion.

Nam Kim also sold its Nam Kim 1 Plant for VNĐ180 billion and transferred its land use licence in the southern province of Bà Rịa-Vũng Tàu for VNĐ250 billion.

In 2019, Nam Kim plans to earn VNĐ850 billion from selling its shares in member companies, associate firms and projects. 

    



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