Nam Long, Q2 profit dropped by 43%, with over VND 1,700 billion of prepaid purchases

Nam Long Group (HoSE: NLG) announced Q2 consolidated financial statements with lower revenue and profit after tax of the parent company in comparison with the same period last year. Revenue dropped by 60% and profit dropped by 43%, to VND 242 billion and VND 68 billion respectively.
The group disclosed that in-progress projects were the cause of the decline. Q2 revenue mainly came from the general contractor, construction services, which accounted for 64%, while revenue from product handover only made up 31%.
After the first 6 months, Nam Long records net revenue of VND 658 billion, dropped by 30%, and parent company’s EAT of VND 179 billion, down by 33%. As such, the company has fulfilled 43% of its projected revenue and 22% of its annual profit plan.

Q2 and the first 6-month results. Unit: billion VND

This year, Nam Long plans to carry on the development of 3 townships, including the Mizuki Park (Ho Chi Minh City, 37 ha), the Akari City (Ho Chi Minh City; 8.5 ha), and Phase 1 Waterpoint (Long An, 165 ha). According to the company’s up-to-date record, about 500 detached villas, duplex villas, and townhouses, etc. at Waterpoint have been sold, bringing a sale revenue of more than VND 2,000 billion, of which VND 1,500 billion recorded in July. The company expects to deliver an approximate of 300 products of this project in Q3 and more than 200 products in Q4. At Akari City, the company has sold more than 130 apartments, making about VND 340 billion.
As of June 30, Nam Long has more than VND 1,417 billion of cash on hand, equivalent to 17% of short-term assets. Inventories increased by 14% compared to the beginning of the period, recorded at VND 4,913 billion, and mostly contained in-progress projects such as Paragon Dai Phuoc, Akari City, Phase 1 Waterpoint Long An.
Prepaid purchase soared to VND 1,713 billion, up by VND 300 billion within 6 months. This is a total of payment made in advance by buyers under the sales contract of apartments, townhouses, villas, and land that are not yet delivered. 

Part of Nam Long’s plan for this year is expanding the land fund through M&A. As of June 30, the company has advanced VND 456 billion to buy land use rights from some companies in Hai Phong, Can Tho, and Ho Chi Minh City. Besides, the company has also paid a deposit of VND 168 billion for land purchases.
In June, Nam Long issued VND 500 billion in bonds to invest in the project with an annual interest rate of 10.5%, maturing in 2023. This loan brought up the total debt to VND 1,573 billion, equivalent to an increase of 89%. The debt to equity ratio was 0.25.

The undistributed after-tax profit by the end of the period was VND 1,845 billion on the charter capital of VND 2,597 billion. The company also had VND 988 billion of equity surplus.

Nguồn: Ndh.vn