Has the model and operational strategy of VRC been efficient when profit before tax in the first 6 months of 2018 reached 83.35 billion Dong?

Posted: 11-09-2018

After the comprehensive restructuring process in 2017, which includes changing Board of Director and business orientation from constructing company to investing real estate and M&A, the figures of business in the first 6 months of 2018 showed the effective result of the process.

According to financial statement in 6 months of 2018, revenues of VRC reached 93.76 billion Dong and EBIT was 83.35 billion Dong, which grew 140% and 150% respectively.

Revenue and income mainly came from the transferring capital and shares of VRC Saigon Company, which is the owner of 5ha residence project in Phu My Ward, District 7 Ho Chi Minh City, when the company applied the decisions that were approved in 2018 Annual Shareholders Meeting. In addition, VRC JSC signed the contract that 100% of VRC Saigon Company will be transferred fully in 2018.

In accordance with Consolidated report on 30/06/2018, total asset reached 1,102 billion Dong, increases 3.3 times compared with the same period last year. In total asset, the large proportions were the 251.6 billion Dong in account receivable, 491.6 billion Dong in inventory, 303.7 billion Dong in subsidiaries investment. Furthermore, the company had absolutely no debt and equity reached 803.8 billion Dong, which was 73% of total equity. Therefore, the book value of company is calculated as 16,077 Dong per share.

In the consolidated report, revenue and other incomes in 6 months of 2018 reached 101.96 billion Dong, which increased 130% and EBIT was 78.7 billion Dong, grew 140%. In addition, there was the difference between consolidated report and separate report because of the accounting based on Circular 202/2014/TT-BTC, so profit/loss of transferring capital in separate report of parent company is recognized by the cost of equity meanwhile in consolidated report, profit/loss of transferring capital is recognized by the net asset in period, which increase the value of net asset at subsidiaries.

It can be seen that the restructuring process and moving into holding company model has begun promote the effectiveness for VRC JSC when the company has started to enjoy “sweet fruit” from the investment after 1 year.