VIS Rating - An affiliate of Moody's presents our update on the 2024 full-year financial performance of 30 top-revenue listed residential real estate developers.
Here's what you need to know:
☑️ In Q4/2024, our covered developers saw a significant revenue increase of 183% year-over-year (yoy), contributing to an 8% growth in annual revenue for 2024. However, total net income still declined by 7% due to higher interest expenses as well as operating losses of developers grappling with legal issues, including NRC, NBB, and LDG. In contrast, large developers such as DXG – the parent company of Ha An (BBB, stable), NLG, and VHM, recorded higher profit margins after successfully completing their key projects, mostly in the low-rise segment.
☑️ In 2024, the developers' total debt rose by 20% yoy to VND 208 trillion, primarily to fund project development costs (e.g., VHM, NLG, DXG), and support working capital or refinance maturing debts (e.g., NVL, NBB). This increase in debt led to a 41% yoy rise in interest expenses.
☑️ The sector's cash resources increased by 46% yoy in 2024, reaching a five-year high, driven by robust investing and financing cash flows. This growth was fueled by broadening funding access through bank loans and project restructuring activities, including mergers and acquisitions, business cooperation contracts, and equity stake transfers. However, operating cash flow remained negative for most developers in 2024, as many developers have increased disbursements to accelerate their project developments after securing legal approvals and plan to launch project sales in 2025 (e.g., VHM, KDH, PDR), while others are still embroiled with bond defaults and project legal roadblocks (e.g., NVL, NBB).
Exhibit 1: Despite improvements in revenue recognition, developers’ operating cash flow continued to deteriorate in 2024 while total debts rose by 20%yoy
Source: VIS Rating
Note: Top 30 listed residential developers in terms of revenue
“Despite improvements in revenue recognition and cash resources, developers’ profitability and operating cash flow continued to deteriorate in 2024. However, we view 2025 will be a year of stronger operating performance for developers. New housing supply from extensive project developments since 2H2024, buoyed by robust homebuyer sentiment, will drive sales and enhance the financial performance of developers in 2025,”– Duong Duc Hieu, CFA – Director – Senior Analyst, VIS Rating.
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