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Building contractors eye rosier prospects after tough 2023
Many building contractors returned to a profit in the first quarter of this year and have a bright outlook for the rest of 2024.
Statistics compiled by Hanoi-based Guotai Junan Vietnam Securities show that both the revenue and net profit of construction firms and building material makers shed 12 per cent and 26 per cent, respectively, last year compared to the previous year.
Leading contractors such as Hoa Binh Construction Corporation (HBC), Fecon JSC (FCN), and Construction Corporation No 1 (CC1) saw a sharp drop in profits.
Le Viet Hai, chairman of HBC, revealed that last year may have been the hardest in the company's 36-year history.
The company counted more than $46 million in losses due to lack of work, tough competition, and unscrupulous behaviour displayed by competitors to seize contracts, among others.
As a result of strong restructuring and concerted efforts to sign new contracts, in the first quarter (Q1) of this year, HBC bagged $68.8 million in consolidated revenue and $2.35 million in consolidated profit.
Fecon also suffered in 2023, posting $1.75 million in losses.
Pham Viet Khoa, the company’s chairman, said that Fecon failed to achieve last year’s projections due to a combination of factors, including the stormy economy, tough competition, low unit prices from signed contracts leading to almost no profit, and escalating financial expenses eating up all accrued profit.
In Q1 of this year, Fecon posted $4.03 million in consolidated revenue and nearly $26,500 in consolidated profit, a drop of 20.6 per cent and 77.4 per cent, respectively, on-year.
Khoa, however, revealed that the company had signed a raft of big contracts, such as the second phase of the Lach Huyen international deepwater port’s terminals 5 and 6, Phoenix Vung Ang port, and infrastructure at Vship Can Tho.
“Our full-year target of counting $166.6 million in consolidated revenue is looking feasible,” said Khoa.
This year, Fecon aims to reach $166.6 million in consolidated revenue and $2.5 million in consolidated post-tax profit, rising 39 per cent and 243 per cent on-year.
At Coteccons Construction JSC (CTD), in Q3 of the fiscal year running from July 1, 2023, to June 30, 2024, the company counted $194.4 million in net revenue, up 49 per cent on-year, and $4.3 million in post-tax profit, equal to a 4.7-fold increase from the year before and setting a record for the previous 15 quarters.
Cumulatively, in the first three quarters of the ongoing fiscal year, CTD saw a 16 per cent hike in its net revenue, reaching $602 million, and $10.04 million in post-tax profit, equal to a 6.4-fold increase on-year.
Meanwhile, in Q1 of this year, Deo Ca Traffic Infrastructure Investment JSC (HHV) counted $28.7 million in net revenue and $4.75 million in post-tax profit, up 37 per cent and 28 per cent on-year.
Its revenue from construction activities approximated $8.2 million, showing a 43 per cent jump on-year.
The rebound of the realty market in 2024 and the government’s proven commitment to accelerate public investment are expected to bolster infrastructure construction throughout the year.
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