Real estate companies still face pressure on capital sources

While some real estate companies have paid large dividends to investors, many others in the sector still have to struggle to rotate capital sources to pay debts and reinvest.

Since the beginning of the second quarter of 2024, some real estate companies have finalised the 2023 dividend payment in the form of stocks and cash to investors.

Some have recorded big payment rates, such as Machin01 Equipment Joint Stock Company (stock code MA1) with 120% (30% in cash and 90% in stocks); Sai Gon Investment Joint Stock Company (SIP) with 31% (16% in cash and 15% in dividends); Nam Tu Liem Urban Development Joint Stock Company (NTL) with 25%; Phat Dat Real Estate Development Corporation (PDR) with 20%; and Sonadezi Long Thanh Company (SZL) with 20%.

Other companies have also paid dividend at rates from 5% to 15%.

According to finance and banking expert Nguyen Chi Hieu, the fact that many real estate companies have simultaneously paid dividends to investors reflects the positive recovery of the real estate market.

However, in reality, the payment does not accurately reflect the extent of the market’s recovery, because the companies’ profits were mostly from the undistributed profits of previous years, Hieu said.

Noting that it is not excluding the possibility when the market is still facing many difficulties, Hieu said the companies made the dividend payment with the purpose of attracting the attention of investors.

In contrast to the big dividend payments of some real estate companies, many other companies in the sector are still facing big difficulties and struggling with the rotation of capital to pay interest and recover.

For example, Nam Land Company Limited has owed up to 900 billion VND in dividends due to not being able to arrange finances after a series of bad deals or Sai Gon Thuong Tin Real Estate Joint Stock Company (SCR) with total assets of more than 10.6 trillion VND, which did not pay dividends in the two consecutive years of 2022 and 2023.

Notably, stocks of many real estate companies such as Song Hong Construction Joint Stock Company (ICG), IDJ Vietnam Investment Joint Stock Company (IDJ), Investment and Construction Joint Stock Company No 18 (L18), Danh Khoi Group Joint Stock Company (NRC), Song Da No 6 Joint Stock Company (SDC) and Song Da Urban Development and Construction Investment Joint Stock Company (SDU) have had their margins cut on the stock exchange because audited after-tax profit of their parent companies in 2023 was negative and was subject to warning, control and transaction restrictions.

However, according to statistics of the Ministry of Construction, capital raising from the bond channel of real estate companies still has some bright spots and it is forecasting business profits and dividend payments of real estate companies in 2024 will be higher than last year.

For example, after a tough period facing an investor confidence crisis in corporate bond issue, real estate enterprises in the first eight months of 2024 issued nearly 46.1 trillion VND of bonds, accounting for 21.7% of the country’s total issued bond value.

Director of the Ministry of Construction’s Department of Housing and Real Estate Market Management, Hoang Hai, said according to the statistics, signs of bond issuance by some real estate enterprises have returned and can be expected to be more stable next time.

However, Hai noted, the pressure of maturing bonds is still a heavy responsibility of real estate enterprises who need to bring confidence to investors for stable and healthy development./.