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DLR: Explanation for reason of stock under alert
On 08/4/2014, Da Lat Real Estate Joint Stock Company
announced explanation for reason of stock under alert as follows:
Profit after tax of the holding company in 2013 was negative
(VND -6,871,621,918) and undistributed profit after tax on 31/12/2013 in
consolidated FS of the Company was negative (VND -6,603,753,062).
I/ Reasons:
Da Lat Real Estate Joint Stock Company operates business in
3 main fields:
1/ Real estate investment and business
Projects of the Company were stagnant and late for schedule
because:
+ Local government adjusted investment guideline and
policies;
+ Budget was not mobilized
+ There were not enough bylaw instruction documents;
+ Payment of investment relating to projects was delayed,
which seriously influenced on financial balance for production, business
activities of the Company.
2/ Construction activities
Revenue and profit decreased because:
+ Projects were stagnant and late for schedule;
+ Public investment was cut down so revenue from receiving
tender decreased;
3/ Production and business of construction materials
+ Revenue and profit from production and business of
construction materials often connect with mineral exploitation certificate of
State authorities; however, legal documents were lately issued, administrative
procedures took long time while the Company still had to pay depreciation of
equipment and machines, interest expense and administrative expense.
+ Construction market went down seriously so inventory
increased highly, competition became more fiercely. The Company also had to
extract provision for inventory discount, provision for bad debts
II/ Solutions:
- Review, evaluate the structure of assets, equity
appropriately in order to balance and use effectively internal resources of the
Company;
- Cooperate with State authorities to solve difficulties in
investment in projects;
- Review, evaluate, build and apply technical economic
limit, suitable technical solutions, and improve capacity in production and
business of construction materials, save input expense, reduce product price,
and improve competitiveness in the market;
- Focus on reducing inventory, actively collect receivables
in order to reduce pressure of finance;
- Cut down unnecessary expenses during the operation. HNX
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