Vietnam is seeing real estate developers struggling with multiple challenges and an unprecedented slowdown, with some property giants reporting losses of hundreds of billions of Vietnamese dong.

The local property market is in downbeat mood as most major real estate companies are facing a financial crunch.

Property enterprises incur hefty losses

Dat Xanh Group JSC has issued its first-quarter financial report, with its revenue dipping 79 percent year on year at VND378 billion (US$16.1 million).

Its land lot and housing sales in the first quarter totaled nearly VND268 billion ($11.4 million), plummeting some 73 percent from last year.

The real estate developer suffered lost revenue, and also cut its workforce by 1,384 employees between January and March.

Given downbeat business results, the property company sustained an after-tax loss of VND117 billion ($5 million) compared with its year-ago profit of VND536 billion ($22.9 million). 

This is the second quarter Dat Xanh Group has suffered a huge deficit.

Similarly, in the first quarter of the year, Novaland Investment Group Corporation reported a post-tax profit of negative VND410 billion ($17.5 million), and made total consolidated revenue of VND604 billion ($25.8 million), plunging 69 percent against the same period last year. 

Facing the same financial distress, Phat Dat Real Estate Development Corporation saw its revenue and profit tumble in the first three months of 2023.

The company made VND192 billion ($8.2 million) in net revenue and VND172 billion ($7.4 million) in consolidated profit, down 69 percent and 67 percent, respectively, year on year.

The embattled real estate company blamed its negative business results on the gloomy property market.

Dreary picture of the real estate market

Many small and medium property companies were in turmoil as their revenue hit bottom.

Ending the first quarter of the year, TTC Land generated VND81 billion ($3.5 million) in consolidated revenue and VND21 billion ($896,000) in profit, while its gross profit margin made a mild year-on-year rise of 26 percent.

The modest business figures resulted from the bleak property market.

Danh Khoi Group JSC generated no earnings growth during the January-March period, while its same-period revenue reached VND51 billion ($2.2 million). 

Excluding all its costs, the real estate developer incurred a loss of VND16.8 billion ($718,300) in the first quarter of 2023. The company reported VND60 billion ($2.6 million) in lost revenue last quarter.

Over the past six months, Danh Khoi has mostly seen no revenue.

In the first quarter of the year, the gloomy mood covered the local real estate market, with no signs of recovery.

There was a slump in the sales and purchase of housing units during the period, according to the Vietnam Association of Realtors.

Vinhomes bucks the down trend

Bucking the loss-incurring trend, Vinhomes, a residential property development unit of Vietnamese conglomerate Vingroup, reported positive business results in the first quarter.

The company’s net revenue totaled VND29.3 trillion ($1.3 billion), skyrocketing 228 percent year on year, supported by the handover of 2,600 apartments at Vinhomes Ocean Park 2 in Hung Yen Province, northern Vietnam.

Its pre-tax profit amounted to VND15.1 trillion ($643.9 million) between January and March this year, a year-on-year upsurge of 156 percent.

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