Leasing industrial parks and workers’ houses helped Viglacera make a profit before tax of more than VND 1,600 billion last year.

In 2022, Viglacera Corporation (VGC) – a member company of GELEX Group recorded a good growth in real estate business. Earnings before taxes of this segment alone were estimated at VND 1,622 billion, exceeding 33% of the year plan and increasing by 57% compared to 2021.  This is the second consecutive year that the real estate segment brought in a profit before tax of more than VND 1 trillion for this business.

In these years, real estate plays a leading role and contributes largely to the profit growth of the Corporation. Last year alone, this segment accounted for more than 70% of Viglacera’s total consolidated profit before tax. Thanks to the driving force from the real estate business, the company’s profit before tax was estimated at VND 2,288 billion, exceeding 35% of the year plan and increasing 48% compared to 2021. This has also been the biggest profit of this business since publishing information from 2010.

A report of Vietcombank Securities (VCBS) stated that this company leased many industrial parks, in which revenue mainly was from Yen Phong Industrial Park expansion with 50 hectares for lease in the first 9 months of the year. The residential real estate segment mainly recorded revenue from Dang Xa urban area and social housing projects.

According to the plan, in the period of 2022-2023, Viglacera will survey and develop a number of new industrial parks in localities with favorable locations. By 2025, this enterprise will have increased the total number of industrial parks to 20 with over 10 new industrial parks and a total area of about 2,000-3,000 hectares.

In addition to the industrial park, Viglacera has started the construction of 2,000 apartments – a worker housing project in Yen Phong Industrial Park (Bac Ninh) and 1,000 apartments in a worker housing project in Dong Mai Industrial Park (Quang Ninh). The worker housing project in Dong Van Industrial Park IV has also been completed and is ready for operation.

In addition to real estate, the traditional business of building materials has also contributed a lot, especially the glass segment. It results from the merge of Phu My Ultra Clear Float Glass Co., LTD with a capacity of 600 tons per day, and the glass prices skyrocketing in the first half of 2022.

However, this year, VCBS assesses that VGC’s profit growth prospect is under pressure. Regarding the industrial park real estate segment, the current ready-to-rent projects such as Yen Phong IIC, Phu Ha, Hai Yen, Tien Hai, Phong Dien have low profit margins and the remaining area is not too much. Therefore, the growth pressure on both revenue and profit in 2023 will be huge. Regarding residential real estate, Viglacera has accounted most of the sold urban areas, so the potential for revenue recognition this year will not be big.

In terms of building materials, last year’s big growth momentum was building glass and tiles, which may face lots of challenges this year. Currently, the glass price is on a dramatic downward trend after the domestic supply recovers and demand declines.