Dear Shareholders,
First and foremost, we would like to thank our Shareholders for their support of Coteccons during this difficult period.
Because of politics and recent negative consequences from the real estate market on Vietnam’s stock market, you may notice uncertainty and a less bullish outlook on the global economy. The VN-Index has fallen by more than 40% from its top in 2022, while Coteccons (stock code CTD) has fallen by more than 71% since its peak at the start of the year.
You have been confused as a result of the share price decrease and the propagation of erroneous information concerning Coteccons’ development prospects. Coteccons fosters a culture of transparency and is devoted to implementing the idea of fairness for all shareholders, therefore any questions from shareholders, whether major or tiny shareholders, will always be heard. As a result, we are responding to shareholders officially with this notice:
1/ Regarding the consolidated financial statements for the third quarter of 2022 published on October 29, 2022:
Coteccons’ net revenue increased 191% year on year in the third quarter of 2022 and 25.5% year on year in the first nine months of 2022 to 8,307 billion VND. A profit of 315 billion VND, up 15.8% year on year, was obtained in the first nine months of 2022 as a consequence of cost savings and higher package efficiency from handover and settlement operations, as was a third quarter gross profit of 96 billion VND, up 4% year on year.
However, Q3 gross profit and gross margin did not expand in tandem with sales, owing to variations in input prices such as building materials, as well as the expenses of mobilizing and employing people. Work grew dramatically. As a result, the cost of goods sold and services provided grew by VND 2,027 billion, or 192.3% year on year, leading the gross margin to fall to 1.06% year on year.
The causes for the reduction in profits were described in the company’s consolidated financial statements for the third quarter of 2022, which were issued on October 29, 2022.
2/ Regarding construction activities:
Coteccons affirmed that that the company’s construction operations are not tied to real estate investors, as some rumors alleged.
The corporation has set aside funds for two projects, Alpha Hill and IFC Saigon Tower One, to be completed by 2020 or early in relation to the investor Van Thinh Phat:
- Receivables for the Alpha Hill project are 34 billion; provision has been made for 34 billion.
- Receivables for IFC Tower One project is worth 7.9 billion, and 7.9 billion has already been spent.
Coteccons does not tolerate the exchange of low offer prices for projects, the company’s board of directors reiterated. The Coteccons brand, also known as “Coteccons Inside,” was formed by the corporation, which is always consistent and transparent and has four different ideals.
3/ Regarding the list of bonds the company is holding:
A bond with collateral and a promise to purchase it back from a trustworthy organization make up the entirety of the company’s bond portfolio, which is made up of bonds from more than 6 different issuers. The corporation claims that the bonds it owns are unrelated to the issuers, however this is based on certain inaccurate sources.
The company has collected $469 billion compared to the number of bonds held at the end of the second quarter of 2022, for the portfolio of bonds owned by the company under a redemption arrangement with a duration of no more than one year and an interest rate of 7.5-12%.
4/ Regarding the provisioning for risky projects:
The Board of Management of Coteccons has proactively made a provision of 961 billion VND for receivables from customers, which the company has recorded from 2020 and earlier, in response to the market’s negative risks, for the purpose of sustainable development and ensuring the assets of our shareholders.
Corporate income tax (CIT), which the company has already paid in the amount of 43 billion dong for the business results of 2021 with a pre-tax profit of 38 billion dong, is still owed by the company for the provisioning. Absolutely not to generate losses in order to avoid paying taxes, as is the rumor making the rounds on social media.
The required steps are being taken by Coteccons to collect debts. Provisions for projects that have been deemed at risk will be reversed as soon as the company has finished its recovery. Acts of spreading false rumors, misrepresenting the truth, making up stories, and harming enterprises shall be dealt with by the corporation in line with the law.
Best regards!
