The Bamboo Capital Group (BCG), a leading multi-sector corporation in Vietnam, posted after-tax profit of VND546.4 billion ($23.3 million) in 2022, while its financial indicators were stable.
The profit was down 45% year-on-year and only 24.8% of its target. The group's net revenue reached VND4,532 billion ($193.3 million), up 75% and reaching 62.5% of its plan.
A representative from BCG said that the failure to achieve its 2022 targets was because they were very ambitiously based on positive assessments of the market at the beginning of the year.
"In addition, the real estate market and the renewable energy segment were subject to policy changes as well as the deteriorating business environment in the second half of the year, which partly affected the progress of projects," the rep added.
Real estate is BCG's biggest source of revenue in the fourth quarter of 2022. Photo courtesy of the company.
Faced with these challenges, BCG adjusted its business strategy, focusing all its resources on overcoming immediate difficulties, while prioritizing minimizing risks. In 2022, the company continued to be profitable, and financial indicators were also stable.
In the fourth quarter of 2022, BCG recorded net revenue of VND1,221 billion ($52.07 million), up 78.3% year-on-year.
Major sources of revenue were real estate with VND272 billion ($11.6 million), renewable energy with VND207 billion ($8.83 million), and construction-infrastructure with VND616 billion ($26.27 million).
According to the company, fluctuations in the foreign and domestic macroeconomy and the continuously increasing interest rates had created heavy financial pressure, making its after-tax profit during the quarter a negative VND339 billion ($14.46 million).
The high price of input materials and low demand for products also had a negative impact on the company's business segments.
Besides, interest expenses increased sharply, and capital mobilization was tight, almost freezing the merger and acquisition (M&A) market. BCG did not conduct any transactions in the fourth quarter.
At the end of 2022, BCG's total assets stood at VND44,006 billion ($1.88 billion), up 17% compared to the beginning of the year, mainly from an increase in long-term investment assets due to real estate and renewable energy projects completed during the year.
Total debt was curbed with an increase of only 3%, and new projects were financed by equity raised from capital increases in 2022 as approved at the general meeting of shareholders.
Thanks to these efforts to increase capital and control debt, BCG's financial leverage indicators in 2022 markedly improved. Total debt to equity decreased from 3.5 times at the end of 2021 to 2.2 times at the end of 2022. BCG was very close to its goal of reducing this ratio to less than two times and ideally to 1-1.5 times.
In addition, the debt-to-equity ratio also decreased to 1.1 times, which meant that financial risks were reduced to a safe level. BCG also said that in 2023, the company has no bond payments due. This is a positive sign for shareholders and investors to expect solid developments at BCG in the future.
At the end of 2022, BCG's cash flow statement showed that the net cash flow from operating activities, although still negative, had significantly improved by 70% compared to 2021. This improvement was due to an increase in receivables and inventory value, mainly from real estate projects that were in the handover stage, the company said.
BCG leaders said that in 2022, there were many changes and challenges, forcing the group to look deeply into its internal business workings and restructure personnel and business lines to consolidate and improve the strength of the business, waiting for the opportunity to climb when the market recovers.