Sonadezi: Profit growth by 2.1 times during 2016-2020 and readiness for development of new projects

At the Annual General Meeting (AGM) 2021, Sonadezi (ticker symbol: SNZ) announced its growth performance in the first term (2016 – 2020) and plans to invest in a number of new projects.

Sonadezi’s Annual General Meeting approved the 2020 dividend rate of 10% in the Annual General Meeting 2021 held on April 28. According to Resolution No. 01/NQ-ĐHĐĐD dated January 25, 2016, the Sonadezi’s Annual General Meeting expected that, by 2018, the dividend rate would reach 4% of the charter capital. However, Sonadezi exceeded its plan by fixing the dividend rate of 7% for 2016 and 2017, 8% for 2018, 9% for 2019 and 10% for 2020.

Sonadezi’s Annual General Meeting voted on issues raised at the meeting

Total consolidated revenue in 5 years reached VND 23,002 billion

As reported, in the first term (2016 – 2020), Sonadezi generated a total consolidated revenue of VND 23,002 billion with an average growth rate of 8.71%. Specifically, its revenue reached VND 7,008 billion from industrial and civil real estate businesses, for a 13.96% growth on average, VND 6,276 billion from rendering waste/wastewater treatment and port handling services, for a 15.87% growth on average; VND 5,157 billion from supply of fresh water, for a 4.53% growth on average; and VND 3,240 billion from construction, trading of building materials and other activities; while its financial income was VND 1,112 billion. Total consolidated profit after tax reached VND 4,449 billion, an average growth of 20.43%.

Although the number of subsidiaries has decreased from 23, from the beginning of the term, to 17, Sonadezi’s revenue and profit after tax as of the end of the term have expanded by nearly 1.4 and 2.1 times respectively.

For 2020, Sonadezi’s consolidated performance indicated a growth of 16-43% in basic indicators. Specifically, it generated VND 5,338.6 billion in total revenue and VND 1,270 billion in profit after while its tax payable was nearly VND 663 billion and its return on equity was about 17.67%. The parent company alone generated VND 582.404 billion in total revenue and VND 418.944 billion in profit after while its tax payable was VND 59.395 billion and its return on equity was 11.01%.

Do Thi Thu Hang – Sonadezi’s BOD Chairwoman was addressing at the meeting

According to Sonadezi’s BOD, during its first term, Sonadezi had completed organizational restructuring and divestment of state capital from many subsidiaries, worked on overall restructuring and banding, effectively delivered existing projects, and developed other projects such as: Chau Duc Urban Industrial Park & Golf Course, Giang Dien Industrial Park, Thanh Phu Industrial Park, Giang Dien Serviced Residential Area, Buu Long Residential Area, Thong Nhat Ward Residential Area, Loc An Residential Area. It also developed an unburnt brick factory, Quang Trung waste treatment plant, Vinh Tan waste treatment complex and a water supply system covering the entire province while also upgrading infrastructure, expanding warehouses and increasing handling capacity of Dong Nai port… Currently, Sonadezi is also building the 300-ha Tan Duc Industrial Park in Binh Thuan.

With efforts for sustainable growth, Sonadezi was awarded the First Class Labor Medal (in 2017) and named in the top 50 Vietnamese brands in 2019 and in 2020, the top 10 UPCoM companies with the best information disclosure and transparency in 2019 – 2020 and the top 10 most reputable industrial real estate companies in 2021.

Expected 5-7% growth in 2nd term

Sonadezi’s Annual General Meeting expects, among others, a 5-7% growth, a dividend rate of 10% that will increase to 12%, by the end of the 2nd term (2021 – 2026). The business plan for 2021 was also approved and most of the targets are expected to be lower than 2020. Specifically, it is expected to generate VND 4,770 billion in revenue and VND 1,012 billion in profit after while its tax payable will be around VND 557 billion and its return on equity will be 13.73%.

Sonadezi shareholders were discussing and contributing their inputs

The parent company, in its annual plan for 2021, is expected to perform slightly better compared to 2020. Specifically, Sonadezi expects to generate VND 629.454 billion in total revenue and VND 442.272 billion in profit after while its tax payable is estimated at VND 75.597 billion and its return on equity will be 11.56%.

A shareholder was raising a question about Sonadezi’s investment and development plan in the second term

On its prudence in business planning for 2021 and the 2021-2026 term, Sonadezi’s leader noted: In the years to come, there will be challenges that directly affect Sonadezi’s operations. Its plan to reduce state capital in the Corporation from 99.54% to 36% and reduce Sonadezi’s stake in subsidiaries to less than 50% is expected to greatly affect its strategic management of the Parent Company as well as the entire Sonadezi system, and Sonadezi will no longer provide consolidated financial statements.

On the other hand, in the past 5 years, exploring and developing new projects has been challenging due to procedures on participation in land auctions, bidding for projects, coupled with rising compensation costs and land prices. In addition, the Covid – 19 pandemic is still complicated and unpredictable and is one of the variables that greatly affects socio-economic development globally. As for Sonadezi’s main area of business, which is industrial park development, trade and travel restrictions between countries have made it difficult to attract FDI investment and new clients.

According to Sonadezi’s leaders, strong growth is a shared target of all businesses. However, given current challenges, a low growth scenario should be developed to drive more efforts within Sonadezi. With its prestige, capacity and experience accumulated over the past 30 years, Sonadezi is expected to develop new projects such as expanding Giang Dien Industrial Park and developing 02 industrial parks in the Southeast provinces and at least 02 residential areas. For the project on conversion of use purposes of Bien Hoa 1 Industrial Park, Sonadezi will leverage its existing strengths for the delivery of this project.

As noted by its leaders, Sonadezi will further promote internal linkage to optimize the strengths of its subsidiaries, increase competitiveness and reduce risks in development of new projects. It will also strengthen cooperation and joint investment to deliver projects within Sonadezi as well as those managed by external partners.

Vice Chairman of Dong Nai Provincial People’s Committee Vo Tan Duc were addressing at the Sonadezi’s Annual Annual General Meeting 2021

At the meeting, Mr. Vo Tan Duc – Vice Chairman of Dong Nai Provincial People’s Committee, representing the owner of state capital at Sonadezi praised Sonadezi’s performance in 2020. In addition to positive business results, Sonadezi provided job and income security to more than 3,500 employees and actively contributed to social security and community service programs. Specifically, Sonadezi donated a PCR testing system worth VND 5 billion and contributed more than VND 1 billion for Covid-19 prevention, in addition to many other charity and community programs.

“In 2021 and the following years, Sonadezi should deliver the dual goals of COVID-19 prevention and economic development, including divestment of state capital from Sonadezi. It should also focus on developing new projects, providing employment security, preparing human resources for the next development stages, better delivering social security, community service activities, and enhancing the corporate value and influence”, suggested Mr. Vo Tan Duc.

Representative of state capital owner at Sonadezi presented congratulations flowers to Sonadezi’s Board of Directors and Supervisory Board for the term 2021 – 2026

Sonadezi’s Annual General Meeting voted to approve the list of 07 BOD members and 03 members of the Supervisory Board for the term 2021 – 2026. Ms. Do Thi Thu Hang was reelected as Chairwoman of Sonadezi’s Board of Directors.

Mr. Tran Thanh Hai – Sonadezi’s BOD Member and CEO addressed at the meeting

Mr. Tran Thanh Hai – Sonadezi’s BOD Member and Deputy CEO was appointed as its CEO and as Mr. Phan Dinh Tham’s successor; Ms. Luong Minh Hien – Sonadezi’s BOD Member and Sonadezi Long Binh’s General Director was appointed as Sonadezi’s Deputy CEO from May 1, 2021. Most of the members of Sonadezi’s Board of Directors and Board of Management serving in the first term were re-elected and re-appointed.