Ho Chi Minh City, September 27, 2024 – No Va Land Investment Group Corporation (HoSE: NVL, “Novaland” or the “Group”) disclosed information on the Reviewed Interim Financial Statements for the first half of 2024.
By end of the second quarter of 2024, Novaland’s Reviewed Interim Financial Statements recorded a total consolidated revenue of VND 3,731 billion, encompassing revenue from sales of goods and provision of service, and financial activities. Net sales revenue amounted to almost VND 1,891 billion, marking a 37% rise compared to the same period last year. This growth was attributed to the handovers at various projects including NovaWorld Phan Thiet, NovaWorld Ho Tram, Aqua City, Palm City, etc. Additionally, net service revenue reached VND 393 billion. For the first half of 2024, Novaland recorded a consolidated after-tax loss of VND 7,327 billion, in contrast to the Unreviewed Financial Statements, which recorded a profit of VND 345 billion.
This variance primarily arises from the provisions for the current reporting period in accordance with the auditor’s independent basis. A significant portion of this provision relates to land rental and land use fees, which are determined based on the 2017 land price framework for the 30.106ha Nam Rach Chiec project, located in An Phu Ward, Thu Duc City, Ho Chi Minh City (known as the Lakeview City project, with The 21st Century International Development Company Limited as the investor), in accordance with the announcement from the tax authority dated January 8, 2021. The provisioned value is VND 4,358 billion.
Lakeview City is a project that the Company exchanged with the 30.224ha project located in Binh Khanh Ward, Thu Duc City for which the Company completed compensation and site clearance in 2008, in accordance with the 2004 Land Allocation Decision. In 2016, the Ho Chi Minh City People’s Committee issued a Decision approving the land price framework based on market rates for both the 30.224ha land in Binh Khanh Ward and the Lakeview City project land. This decision was made to facilitate the exchange for the Company, with the milestone for land price determination for both projects being the year 2008. Accordingly, after assessing the value of land use rights and the locational differences between the two land plots, the Company was required to pay an additional sum of nearly VND 52.7 billion. This financial obligation was duly recorded in the Company’s accounting books in 2016.
On December 29, 2020, the Ho Chi Minh City People’s Committee issued the Decision No. 4777/QĐ-UBND to approved the land price framework for the 30.106ha Nam Rach Chiec land, located in An Phu Ward, District 2, based on the land price framework established in April 2017, rather than the previously mentioned milestone of 2008. Accordingly, the Ho Chi Minh City Tax Department issued the Notice of Land Rental Payment No. 268/TB-CTTPHCM and Notice of Land Use Fee Payment No. 269/TB-CTTPHCM, both dated January 8, 2021, indicating that the total amount due for land rental and land use fees is nearly VND 5,176 billion. The Company does not agree with the determination of the time for calculation of land use fees as April 2017 because the Company already completed compensation in 2008. At the date of issuance of the Reviewed Interim Financial Statements, the Ho Chi Minh City Tax Department and Thu Duc City Tax Department have issued Decisions to terminate the prior enforcement decisions on tax management measures, while awaiting the outcome of the resolution regarding land use fees and land rental by competent authorities, in accordance with the Official Letter from the Ho Chi Minh City People’s Committee.
Additionally, in accordance with regulations, when withdrawing land, the State is obliged to compensate in the form of land at an equivalent value. If land is unavailable, compensation should be rendered in cash. Thus, Novaland asserts that there is solid ground for establishing the appropriate time for calculating the land exchange price for the Lakeview City project being 2008. At present, Novaland continues to petition to the Ho Chi Minh City People’s Committee and relevant Departments to consider and handle the matter thoroughly. This provisioned amount will be adjusted and reversed when it meets the eligibility criteria.
Furthermore, in accordance with the auditor’s independent basis, the financial revenue derived from lending and business cooperation activities, and on other income from contract penalties arising during the period but not yet collected in cash as of June 30, 2024, has been adjusted down. At the date of issuance of the Reviewed Interim Financial Statements (September 26, 2024), these amounts have been fully collected. Thus, these earnings will be recognized in the Audited Financial Statements for year end 2024.
With the support of partners, Novaland’s projects are continuously being re-implemented, constructed and completed for handover to customers.
Regarding the opinion of the Independent Auditor related to the Group’s going concern assumption, Novaland is continuing to implement many solutions to be able to generate enough cash flow to finance the Group’s operations. The Group’s business activities in the first half of 2024 have had positive changes, with the revenue from handover reaching VND 1,891 billion, an increase of 37% over the same period.
It is expected that by the end of 2024, Novaland will complete construction and handover for 2,600 products. Alongside the Group’s dedicated efforts, the comprehensive guidance from the Government, local authorities, as well as favorable legal developments and ongoing support from financial and construction partners, Novaland is in the process of restructuring its finances, gradually restoring business operations, restoring investor confidence and fulfilling its commitments to customers.
Currently, key projects NovaWorld Phan Thiet (Binh Thuan), NovaWorld Ho Tram (Ba Ria - Vung Tau) and Aqua City (Dong Nai) are under construction and continuously investing in diverse amenities and activities aimed at creating attractive destinations, to provide a multifaceted living experience for residents and enhance the appeal of the local areas, as well as contribute to the development and completion of local infrastructure and economy.
Ending the 90-day Summer Fest (from June to the end of August 2024), which featured a variety of entertainment activities, music, sports, and beauty contests, NovaWorld Phan Thiet attracted more than 2 million visitors
Novaland is consistently committing its best endeavour to sustain its business operations while aligning the interests of Customers, Investors, Partners, and Stakeholders. The Company will thus continue to complete and deliver standard townships, thereby contributing to the transformation of local landscapes and fostering economic growth, tourism, and social welfare in the regions invested and developed by Novaland.