Soon after the Annual General Shareholders Meeting (AGM) in 2019, the new seven-member Board of Directors at Vinaconex made some very careful and cautious moves to ensure the continued sustainable development of the Vinaconex Corporation.
Big commitments
Although the consolidated revenue at Vinaconex in 2019 reached only 98% of the targeted plan, after tax profit (CIT) still soared by 6% and increased by 23% compared to 2018, reaching VND 787 bn. In the parent company, revenue in 2019 increased by 13% compared to 2018; and profit after tax reached VND 727 bn, an increase of 12% in the targeted plan and 24% more compared to 2018. Member companies showed good business results as well, such as Vinaconex 25, Vinaconex 9, Vinaconex Invest, Vinaconex CM, NEDI2, VIWACO, VINASINCO, and Dung Quat. Among these, four companies achieved a turnover of about VND 1,000 bn.
The main activities of Vinaconex are construction, real estate and financial investment. Among the successful projects are the Mikazuki 5-star Resort Hotel complex in Da Nang; the 5-star Grown Hotel in Laos; the Vincity Ocean Park; StarLake; the Bac Ninh apartment building; the 25-floor Nam Cuong apartment building; the 27-floor Dai Dong A apartment building; the Flamingo Cat Ba; Long Son petrochemical refinery; Bohemia at 25 Nguyen Huy Tuong; 97-99 Lang Ha; and 93 Lang Ha.
In the field of construction, Vinaconex has been looking for new investment projects such as in industrial urban areas and in resort urban areas in all three regions of the country from Hanoi, Quang Ninh, Hai Phong, Bac Ninh, and Ha Nam to Ho Chi Minh City, Da Nang, Quang Nam, Phu Yen, Phan Thiet, and Dong Nai Provinces. In financial investment, subsidiaries, joint ventures and associates having stable capital contribution will form an additional value chain for construction and real estate activities, and contribute to increasing the scale and profitability of the Corporation.
To implement projects as well as participate in BOT projects under the plan of building some North-South Expressway sections in the East assigned for the period of 2017-2020 at the General Meeting of Shareholders on 29 June, the Board of Directors of Vinaconex are expected to consult about the issuance of more than 66 mn shares at VND 15,000 per share, to increase charter capital. Expected proceeds from the issuance could be over VND 990 bn. The proposed projects of Vinaconex will include: Nghi Son-Dien Chau; Dien Chau-Bai Vot; Nha Trang-Cam Lam; Cam Lam-Vinh Hao; and Phan Thiet-Dau Giay.
At the AGM, the Board of Directors of Vinaconex submitted a report on transferring about 441 mn VCG shares from HNX for listing on HOSE. According to a proposal at the AGM, Vinaconex expects to pay 6% cash dividend to shareholders, equivalent to about VND 265 bn.
Strong leadership
Mr. Dao Ngoc Thanh, Chairman of Board of Directors at Vinaconex, shared some company successes in the first year of changing ownership structure. He said that the human factor has played a very decisive role in the economic growth of the Corporation, and by moving in the direction of sustainable development, has defined the goal of the company very clearly. He firmly believed that it was the effort and determination of all 1,500,000 employees under leadership of the Party Committee and the Board of Directors that brought about this success. Faith and determination have been the key players in Vinaconex reaching its present goal.
Mr. Nguyen Xuan Dong, General Director of Vinaconex, said that the field of construction was one of Vinaconex strengths, and Vinaconex will step up the bidding, especially for infrastructure projects and public investment projects invested by the State. In the real estate business, where Vinaconex has for many years ranked at the top, the company will prioritize resources to invest in key transport infrastructure BOT projects to create jobs for the whole Corporation. The company will also prioritize acquisition of real estate projects for an early investment, to create jobs and improve efficiency in the short and long term.
In financial investment activities, Vinaconex will promote the activities of member companies to form links and complement each other. In addition, Vinaconex seeks investment and divestment opportunities in some ineffective units, or non-core units, to use capital gained to invest in newly established companies in core business areas, or in which the company is operating efficiently.
Solutions in Splendora project
One project that has been the subject of diverse views among major shareholders of Vinaconex is Splendora, the Bac An Khanh New Urban Area project. The project is being implemented by the An Khanh New Urban Development Joint Venture Company Ltd (An Khanh JVC), who also are the investor. An Khanh JVC has chartered capital of about VND 680 bn with two major shareholders Vinaconex and Phu Long Real Estate JSC both contributing 50% capital equally. Such capital contribution has created some disadvantages in implementing projects invested by the company due to important issues that must be agreed by both parties. This is also the reason for delay of the project.
In order for the project to be completed, a restructuring plan for the North An Khanh Urban Area was proposed by Vinaconex at the AGM, authorizing the Board of Directors to implement the plan. Option 1 was to transfer all of Vinaconex capital in An Khanh JVC to the remaining capital contributing member or other investors wishing to recover capital and invest in some potential projects. Option 2 was for Vinaconex to negotiate buying the entire remaining capital contribution from An Khanh JVC, so that Vinaconex could immediately set about implementing and completing the project.
