|
VNECO and large debts to collect
Vietnam Electricity Construction Joint Stock Corporation (HOSE: VNE) is struggling with large debts to collect and high expenses of constructions in progress, experts warned.
The total asset of the Da Nang City-based construction firm, also known as VNECO, slightly decreased to VND1.7 trillion (US$85 million) at the end of 2010.
Statistics show the total short-term debt to collect of VNECO’s subsidiaries reached VND147 billion on December 31st, 2010, making nearly 10 percent of its total asset.
The Ho Chi Minh City-listed company has nine subsidiaries and six joint ventures, according to its financial reports.
Experts noticed that VNECO’s debts to collect from individuals were large, with three persons identified only as L.P.L., L.T.T.V. and N.K.H. owing more than VND380 billion ($19 million).
“If the company deposited that amount to banks with a saving rate of 16 percent per annum, it would earn over VND5 billion monthly, which is larger than the entire profit of 2010,” said an analysts in HCMC.
Many investors said VNECO should make more explicit explanation for those debts, which have triggered concerns about a waste of working capitals.
The company said in its financial report that its short- and long-term loans amounted around VND15 billion and VND230 billion only. In the third quarter of 2007, VNECO issued five million five-year bonds worth VND100,000 apiece with a coupon rate of 10.15 percent per annum.
The net revenue from construction sector of the company last year amounted to VND175 billion ($8.75 million), a half of 2009’s figure. VNECO also issued additional shares in 2010 to raise the registered capital to VND637.2 billion from VND320 billion.
Among VNECO’s subsidiaries is steel maker Meca VNECO Investment and Electricity Construction JSC, of which the parent firm holds 70 percent stake.
The HCMC-based company is the contractor and builder of the Vneco Plaza, which has an area of nearly 5,500 square meters and a total investment of VND489 billion. The construction work started last year and will finish in September 2012.
Meca said in the financial report that it spent an expense of construction in process of VND91.2 billion for the project in the last quarter of 2010, which made one fifth of the project’s total investment.
“How will Meca manage to have more than VND400 billion to finish the project in 2012? The company is expected to cope with a shortage of capitals as its parent firm VNECO was also pursuing many other projects,” a broker told Dau Tu Tai Chinh Newspaper.
The an expense of constructions in process of VNECO last year reached around VND130 billion, including the urban zone My Thuong, supermarket Green Mart and office building Vneco.
Financial experts warned that the three projects cost VNECO a lending interest of more than VND15 billion in 2010, making three third of last year’s profit. Of the amount, lending interest of the office building project reached VND12 billion.
VNECO made a negative earning result in 2010, with an after-tax profit of more than VND26 billion ($1.3 million) only compared to the registered capital of over VND630 billion.
Thai Ca - Dong Phong - Vu Minh
sggp
|
