The profitability of the real estate market prior to 2010 made companies pour money into the sector, including seafood processor Dabaco (DBC) and Lam Son Sugar (LSS). However, once the economy became troubled, they faced a lot of challenges.
Lam Son Sugar's profit in the first six months of this year plunged over 63 percent compared to the same period last year, reaching only 23.2 billion VND (1 million USD).
LSS shares by mid August dropped around 50 percent compared to the corresponding period last year. Their shares currently trade at only 12,000 VND per unit.
The sugar company has not finished its investments in several projects, including Lam Son Hotel, Linh Son Eco-tourism Area and other complexes, which cost 325 billion VND (15.3 million USD).
The company's chairman Le Van Tam said since the beginning of this year he had restructured the company to stop investment in real estate and focus on sugar production.
Meanwhile, as of June, Dabaco recorded an unfinished investment cost of 514 billion VND (24.2 million USD). Three years ago the company established Dabaco Real Estate Co Ltd and issued bonds worth 556 billion VND (26.2 million USD) to pour into the property sector.
Around 150 billion VND (7 million USD) from the bond value was used. The company has decided to direct the remaining money into their main activity of seafood processing.
In the long term, if these lefthanders can sell their real estate projects, they would have resources to overcome the consequences of the current economic difficulties.
Tam said he hoped the business results in the second half of this year would improve as his company started to get rid of real estate.-VNA
