23:12 (GMT +7) - Friday 16/11/2018

Business

Novaland sees slight growth in Q3 revenue

Released at: 11:15, 05/11/2018

Novaland sees slight growth in Q3 revenue

Photo: Novaland

Vietnamese developer releases latest financials.

by Hung Cao

The Novaland Investment Group Corporation (stock code: NVL) recently released its financial results for the third quarter of 2018, with revenue reaching $104.7 million, an increase of 2 per cent year-on-year.

Compared to the first nine months of 2017, gross profit increased 25 per cent to nearly $89 million this year, with the gross profit margin improving from 29 per cent to 31 per cent year-on-year.

For the first nine months, the firm recorded accumulated net revenues and net profit after tax (NPAT) of nearly $289 million and $60.5 million, respectively. The NPAT accounted for 44 per cent of the fiscal year profit target. NPAT was $28.6 million in the third quarter, up 33 per cent year-on-year.

Novaland handed over 895 units from two new projects in the quarter, The Sun Avenue and Sunrise Riverside, resulting in a total of 1,923 units handed over in the first nine months of 2018. Ninety-one per cent of third-quarter revenue was attributable to the Lakeview City, Lucky Palace, Rivergate Residence, Tresor Residence, Golden Mansion, Wilton Tower, Kingston Residence, Sun Avenue and Sunrise Riverside projects. Significant handovers are expected in the fourth quarter that will further drive revenues.

However, NPAT in the first nine months increased only slightly, by 5 per cent year-on-year, due to the impact of reductions in financial income and increased interest expenses. Higher interest rates are a common issue for real estate developers in the process of continually expanding their land bank and implementing multiple projects simultaneously, a representative from Novaland explained.

Net revenue in 2018 is estimated at $763.3 million, an increase of 53 per cent against 2017, fulfilling 82 per cent of the whole year business plan approved in March by the Board of Directors.

According to the company representative, this is due to approximately 6,000 units expected to be handed over in 2018, compared to 6,700 units in the plan. The company has faced a number of objective difficulties in completing the legal processes required before the delivery of units to customers, resulting in slight delays in handover. He acknowledged that this means the company is unlikely reach the original target set at the last annual shareholders meeting.

Accumulated cash and cash equivalents at the end of the third quarter was around $209 million, down 27 per cent due to M&A activities, construction costs, and interest payments.

Share of profit from associates increased to $45.2 million due to a revaluation of investment in associates relating to Victoria Village and The Grand Manhattan projects.

In the third quarter, Novaland completed topping out at a number of projects, including Saigon Royal Residence and G2 and G5 Towers at Sunrise Riverside. The company is speeding up the construction of projects under development in order to deliver these on time, as committed to with customers.

In the fourth quarter, the company is expected to officially announce the launch of The Grand Manhattan - a large-scale project located in a premium location in Ho Chi Minh City’s District 1, with a scale of approximately 1,000 luxury apartments at a sales price starting from $6,000 per sq m. In addition, the Nova Hills Mui Ne Resort & Villas project, featuring classic Spanish architecture and many world-class facilities, is also expected to be launched in the fourth quarter.

User comment (0)

Send comment