Thu 12/01/2022 03:08 AM
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Relevant Documents:
Q3'2022 Results
Q3’2022 Investor Presentation

Vietnamese property developer BIM Land Joint Stock Company posted today, Dec. 1, its consolidated financials for the third quarter ended Sept. 30, reporting a 20% year-over-year increase in revenue for the quarter to VND 778.5 billion ($31.8 million), and a 47% year-over-year decline in EBITDA for the quarter to VND 158.4 billion.

The following is a snapshot of BIM Land’s financial performance:

 
Source: Company disclosures, Reorg estimates

The decline in EBITDA can largely be attributed to a VND 270 billion foreign exchange loss recorded during the third quarter of 2022 (more below).

For the nine months ended Sept. 30, contracted sales rose 49% year over year to VND 7.953 trillion, which represents 83% of planned contracted sales of VND 9.552 trillion for full year 2022. Unrecognized contracted sales as of Sept. 30 increased 17% year over year to VND 18.01 trillion, according to the investor presentation.

During the third quarter of 2022, the company recorded VND 3.121 trillion of contracted sales, of which VND 1.817 trillion relates to the underwritten sales contract for all 772 apartments at the ICON 40 project in Ha Long. The contract is with the same sales agent with which BIM Land signed a VND 2.689 trillion underwritten sales contract for its Horizon project in the second quarter of 2021.

BIM Land is in final discussions with another sales agent to underwrite all 250 townhouse units at its Quy Nhon new launch, according to the investor presentation. The company is also investigating legal requirements to sell its branded projects such as Park Hyatt and Intercontinental villas to regional investors from Hong Kong, Singapore, Malaysia and China.

The company expects to launch its two villa projects in Thanh Xuan Valley in the fourth quarter of 2022.

For the nine months ended Sept. 30, BIM Land collected VND 3.528 billion of cash and incurred VND 3.723 billion of construction capital expenditure, the investor presentation shows.

Hospitality Services

While revenue from hospitality services jumped more than tenfold year over year to VND 217.3 billion for the third quarter of 2022, the segment recorded a gross loss for the quarter as costs of goods sold for hospitality services rose to VND 354.6 billion, based on the financials.

Each of BIM Land’s three hospitality assets in Phu Quoc recorded a gross operating loss for the nine months ended Sept. 30, as demand fell in the third quarter in the wet season. In particular, Regent Phu Quoc - the company’s ultra luxury resort which opened in April 2022 - recorded a gross operating loss of VND 41.3 billion for the nine months ended Sept. 30, despite booking a revenue of VND 74.5 billion during the same period.

While the occupancy rate for Fraser Suites Hanoi reached 78% for the nine months ended Sept. 30, Regent Phu Quoc, Citadines Marina Halong and Sailing Club Signature Resort Phu Quoc all saw occupancy rates that were significantly below budget, the presentation shows.

Liquidity, Debt Covenants

As of Sept. 30, the company’s cash and bank balances amounted to VND 775.3 billion, against VND 1.319 trillion of current bank borrowings.

During the quarter, the company used VND 160.4 billion of cash for operating activities, received VND 363.6 billion of cash from investing activities - including VND 949.3 billion received from transactions of debt instruments of other entities - and used VND 172.3 billion of cash for investing activities, according to the financials.

Headroom for incurrence of additional debt remains tight given the company’s reported leverage ratio of 2.91x as of Sept. 30, set against a 3x gross leverage ratio incurrence covenant included under the company’s loans from International Finance Corporation (IFC). A 3.5x gross leverage ratio maintenance covenant will take effect from 2023 pursuant to the company’s IFC loans, as highlighted in Reorg’s earlier tear sheet.

As of Sept. 30, 68% of the company’s total debt is denominated in USD, which implies that the company’s gross leverage ratio is likely to have deteriorated further since Sept. 30 as USDVND rose further by almost 3% thus far in the fourth quarter of 2022.

The company’s capital structure is as below:


 






















































































































































































































































































































BIM Land Joint Stock Co.


06/30/2022

EBITDA Multiple

(VND in Billions)

Amount

Price

Mkt. Val.

Maturity

Rate

Yield

Book

Market


Vietcombank - Quang Ninh Branch 1

74.6


74.6




BIDV - Quang Ninh Branch 1

152.7


152.7




BIDV - Phu Quoc Branch 1

1.4


1.4




Agribank - Quang Ninh Branch 1

90.7


90.7




Total Short-term Bank Borrowings

319.4

319.4

0.1x

0.1x

Vietcombank - Quang Ninh Branch 2

209.7


209.7

Aug-22-2023



BIDV - Quang Ninh Branch 3

133.1


133.1

Sep-18-2023

10.500%


BIDV - Phu Quoc Branch 4

310.0


310.0

Mar-11-2024



VDB - Kien Giang Branch 5

48.6


48.6

Dec-16-2024

8.550%


Vietinbank - Phii Quoc Branch 6

0.8


0.8




BIDV - Chuong Duong Branch 7

97.5


97.5

Mar-03-2025



Lao Viet Bank 8

42.2


42.2

Mar-03-2025

Reference Rate + 2.500%


MB Bank - Hoang Quoc Viet Branch 9

160.4


160.4

Jan-03-2029

9.800%


Techcombank

695.0


695.0




IFC 10

1,537.5


1,537.5

Jun-15-2027

USD LIBOR + 2.725%


Total Long-term Bank Borrowings

3,234.8

3,234.8

1.0x

1.0x

Lease Liabilities

586.6


586.6




Total Lease Liabilities

586.6

586.6

1.2x

1.2x

$200 Million 7.375% Senior Notes Due May 2026

4,767.0


4,767.0

May-07-2026

7.375%


Total USD Bonds

4,767.0

4,767.0

2.6x

2.6x

VND 1 Trillion 10.00% Domestic Bond Due Dec 2023

1,000.0


1,000.0

Dec-30-2023

10.000%


Total VND Bonds

1,000.0

1,000.0

2.9x

2.9x

Total Debt

9,907.8

9,907.8

2.9x

2.9x

Less: Cash and Equivalents

(2,139.0)

(2,139.0)

Net Debt

7,768.8

7,768.8

2.3x

2.3x

Operating Metrics

LTM Reported EBITDA

3,414.0


Liquidity

Plus: Cash and Equivalents

2,139.0

Total Liquidity

2,139.0

Credit Metrics

Gross Leverage

2.9x

Net Leverage

2.3x


Notes:
Sources: Refinitiv, company filings, Reorg; Cash includes VND 1.4T of term deposits
1. Maturity: <12 months
2. Interest rate: 12M VND + 3.3%; Secured on land use rights and land (Citadines Marina Ha Long Project)
3. Secured on land use rights and land (Green Bay Garden Project)
4. Interest rate: Reference Rate + 3.5%; Secured on land use rights and land (Intercontinental PQ)
5. Secured on land use rights and land (Bai Truong Tourism Complex Project)
6. Maturity: 2022 - 2024
7. Interest rate: Reference Rate + 2.5%; Secured on land use rights and land (Crowne Plaza & Royal Square Project, Laos)
8. Interest rate: Reference Rate + 2.5% to 4.5%; Secured on land use rights and land (Crowne Plaza & Royal Square Project, Laos)
9. Interest rate: 24M VND rate + 3.2%; Secured on land use rights and land (BIM's office at Aqua Central Tower)
10. Guaranteed by Parent, HL; Current Ratio > 1.1x, Debt / EBITDA < 4.0x (< 3.5x after Jan. 1, 2023), DSCR > 1.25x, adj. tangible net worth > $300M; Must generate >$80M of recurring revenue annually from FY'21



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