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Novaland's 2017 net profit at $91mn, up 22.5%

Released at: 10:49, 07/02/2018

Novaland's 2017 net profit at $91mn, up 22.5%

Photo: Novaland

Real estate developer posts substantial growth in revenue and profit during 2017.

by Hong Nhung

The Nova Real Estate Corporation (Novaland) has released its Q4/2017 accumulated financial statement, in which total revenue in the quarter reached nearly $259 million, 32-times higher than in the fourth quarter of 2016, while net profit after tax (NPAT) was $31.5 million, up an impressive 629 per cent.

Total revenue in 2017 was $512 million, an increase of 58 per cent against 2016 but only nearly 70 per cent the target set.

The positive growth results from it delivering seven projects in the last quarter of the year with 3,596 apartments, a touch higher than the 3,325 in 2016.

Novaland said it would continue to focus on residential while expanding into the new product types of hospitality and commercial under the second stage of its strategic roadmap.

There were six key projects in Ho Chi Minh City contributing to revenue, of which 36 per cent came from Lakeview City in District 2, 16 per cent from Rivergate Residence in District 4, 15 per cent from The Tresor Residence in District 4, 9 per cent from Gardengate Residence in Phu Nhuan district), 8 per cent from Lucky Palace in District 6, and 6 per cent from Orchard Garden in Phu Nhuan district.

Most projects have seen high absorption, from 94-100 per cent, except for Rivergate Residence (83 per cent). The average unit price was around $145,000, an increase of 18 per cent compared to 2016. Novaland last year saw 5,802 successful transactions, accounting for about 18 per cent of the total apartments sold in Ho Chi Minh City in 2017, according to CBRE Vietnam.

The company has about 25 projects under development that will be delivered in the near future. Handover is expected this year in eleven projects, contributing significantly to both revenue and inventory reduction.

Novaland completed the acquisition of two projects in Ho Chi Minh City in the fourth quarter: Newton Residence in Phu Nhuan district and Sunrise Cityview in District 7, acquiring 99.89 per cent and 99.81 per cent of ownership, respectively, under its ongoing M&A strategy. The average absorption rate at the two projects was 91 per cent. Long-term investments, including those in associated entities, joint ventures, and other entities, rose 178 per cent year-on-year.

2017 revenue and NPAT increased 58 per cent and 24 per cent year-on-year, respectively, with both representing nearly 70 per cent of their target.

Owners’ equity and charter capital increased 32 per cent and 9 per cent, respectively, via the successful private placement of ordinary shares for Credit Suisse AG Bank, Singapore Branch’s loan conversion of $60 million in the second quarter of 2017, and 20 million shares in an employee stock ownership plan (ESOP) issued in the fourth quarter. Credit Suisse also approved raising the credit limit to $125 million, which has been fully disbursed for Novaland to finance its projects.

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