Gas and oil firms fall on hard times in real estate sector
18:00 | 28/02/2018 Print Article
Irrespective of listed domestic giants like Vingroup and Novaland Group securing substantial sales revenue and profits from the real estate sector in 2017, the 12 medium- and small-scale domestic gas and oil firms which previously poured significant capital into the sector were reported to suffer heavy losses over several consecutive years.
|Petroland's net loss was $1.5 billion in 2017, the sixth consecutive years of massive losses |
Specifically, one of the most talked-about gas and oil firms to suffer heavy losses was PVC Petro Capital & Infrastructure Investment or Petroland, under the ticker PTL on the Ho Chi Minh City Stock Exchange (HSX), which reported a loss of VND36 billion ($1.57 billion) over the span of 2017, up 38.46 per cent against 2016, marking the sixth consecutive year of losses.
Additionally, Petrovietnam-Nghe An Investment & Trading (ticker PXA on HNX), suffered a total loss of VND10 billion ($436,000) in 2017, which was half of the losses in 2016. Aside from PXA, numerous listed gas and oil firms including Vietnam Investment JSC (HNX: IDJ), Simco Song Da JSC (HNX: SDA) and Bao Thu Industrial Development and Investment JSC (HNX: BII) reported heavy losses for several consecutive years.
Although recording negligible losses, Song Da Urban & Industrial Zone Investment & Development JSC (HSX: SJS) or Sudico recently reported appalling business results of negative VND22 billion ($959,200) in sales revenue as a result of a reduction of VND66 billion ($2.87 million) in sales revenue from the firm’s land transfer at South An Khanh Urban Zone, stirring up major concerns among investors. Besides, Sudico experienced a 25 per cent slump in total profits over the course of 2016-2017, going from VND177 billion ($7.73 million) in 2016 to VND133 billion ($5.81 million) in 2017.
Similarly, Song Hong Construction JSC (HNX: ICG) also reported slight profit, with VND385 million ($16,824.5) in 2017, which was a 93 per cent drop against the same category in 2016, stepping into the fourth consecutive years of bleak business performance.
Talking with VIR about the existing issues of these firms, a Vietnamese economist stated that one of the root causes was that restructuring activities brought fluctuations in the past four to six years, creating “all or nothing” opportunities—either appealing to significant foreign and domestic investment or another four to six years of treading waters.