Infrastructure firms eye rosier prospects

The government's commitment to accelerate public investment offers bright development prospects for infrastructure developers.

Luong Duy Phuoc, director of analysis at Ho Chi Minh City-based Kafi Securities Corporation, said that the huge volume of work needed to push ahead with infrastructure projects, particularly the government’s plan to complete the national motorway network, will motivate the growth of infrastructure developers.

In its Q3 consolidated financial report for the 2023-2024 fiscal year (coinciding with Q1/2024), renowned contractor Coteccons Construction JSC raked in $194.3 million in revenue and nearly $4.38 million in post-tax profit, up 49 per cent in revenue and 376 per cent in profit, respectively, compared to a similar period the previous year and also setting a record profit for the past four years.

Coteccons has changed its business targets for the 2023-2024 fiscal year, raising its revenue target to $833.3-$834.2 million, up 12-15 per cent over the previous target, and its post-tax profit target to $12-$12.3 million, up from 5-8 per cent.

The company’s leadership believes they can achieve these new targets by the end of this fiscal year, June 30.

Nguyen Tuan Huynh, CEO of contractor Civil Engineering Construction Corporation 4 (Cienco 4), revealed that infrastructure development firms have enormous potential for growth in the context that the government is committed to pushing public investment and starting new infrastructure projects.

This has lain the bedrock for these firms to aim high in 2024.

For instance, this year Cienco 4 envisages counting $187.5 million in revenue, up 65 per cent, and $10.4 million in post-tax profit, soaring 92 per cent compared to 2023.

Meanwhile, CEO Tran Hong Phuc of Phuc Hung Holdings, noted that construction will continue to be its core business this year and the company will concentrate its resources in this field to reach a revenue target approximating $104 million.

“To reach this goal, we will further bolster marketing, procurement, and branding to big developers, as well as public investment and foreign-invested projects. For the real estate segment, we will focus on accelerating the pace of delayed projects such as the An Phu Thai Binh residential blocks and the Bac Nghi Kim-Nghe An urban area with an estimated revenue of around $4.2 million. We expect rosier outcomes in the second half of this year,” said Phuc.

According to analyses by Kafi Securities, for specific projects such as road tunnels, very few businesses can execute them, so sound financial resources and good execution capacity will give firms advantages over others.

Eminent names in this field include Vinaconex and Deo Ca Group JSC.

Vinaconex is often among the top building contractors in terms of revenue, and has the capacity to execute high-value bidding packages.

This year, the company aims to count $39.6 million in post-tax profit, a 2.4-fold increase compared to 2023.

Meanwhile, Deo Ca Group JSC has reported five ongoing infrastructure projects alone approximating $150 million.

Deo Ca has advantages in road tunnels, and the company itself now manages and operates most road tunnels in Vietnam.

The company aims to reap $131.2 million in revenue in 2024, up 17 per cent, and $16.8 million in post-tax profit, up 11 per cent on-year.

Minh Thuy

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