NVL - Financial gains from M&A support Q2 2021 results - Earnings Flash
  • 2021-08-02T00:00:00
  • Company Research

NVL posted encouraging Q2 2021 results with net revenue of VND2.5tn (USD111mn; +2.6x vs Q2 2020’s low-base) and NPAT-MI of VND1.3tn (USD57mn; +48% YoY) on the back of financial gains via M&A. Per management, NVL recorded a gain of VND1.7tn (USD77mn) of negative goodwill on a bargain purchase following the acquisition of a 700-ha land bank in Mui Ne, Binh Thuan Province (close to NovaWorld Phan Thiet) via a group of companies — Nova Final Solution JSC, Dang Khanh Real Estate and Dau Tu Tong Hop Mui Ne JSC. NVL also continued divesting ~20% of its stake in Project S (the Phu Dinh Harbour City project; 60 ha in District 8, HCMC) in Q2 2021 to record a gain of VND484bn (USD21mn; NVL owns a ~20% stake after this transaction). We note that in Q2 2020, NVL recorded a gain of VND1.7tn (USD74mn) from divesting nearly 40% of its stake in Project S.

For H1 2021, NVL’s net revenue surged 3.2x to VND7.0tn (USD307mn) while its NPAT-MI grew 53% YoY to VND1.9tn (USD81mn). These results fulfilled 40% and 45% of our respective full-year forecasts. As such, we foresee insignificant change to our 2021F NPAT-MI forecast of VND4.2tn (USD181mn; +6% YoY), pending for a fuller review.

Figure: NVL’s H1 2021 results


 VND bn

Q2 2020 

Q2 2021

YoY% Growth

H1 2020 

H1 2021

YoY% Growth

2021F

H1 as % of 2021F

Net revenue

710

2,544

2.6x

1,664

7,050

3.2x

17,598

40%

Gross profit

217

858

3.0x

583

2,575

3.4x

6,309

41%

Selling expenses

-16

-183

10.5x

-26

-322

11.5x

-338

95%

G&A expenses

-350

-292

-17%

-614

-611

0%

-1,353

45%

EBIT

-149

383

N.M.

-57

1,642

N.M.

4,618

36%

Financial income

1,807

1,334

-26%

2,665

1,906

-28%

2,615

73%

Financial expenses

-365

-1,829

401%

-751

-2,283

2.0x

-2,575

89%

      Interest expenses

-169

-118

-30%

-302

-1,408

3.7x

-2,318

61%

Other income/ (expense)

-295

1,610

N.M.

-368

1,495

N.M.

0

N.M.

 

 

 

 

 

 

 

 

 

PBT

998

1,497

50%

1,487

2,758

85%

4,657

59%

PAT

875

1,313

50%

1,177

2,014

71%

4,147

49%

NPAT-MI

891

1,321

48%

1,213

1,857

53%

4,160

45%

 

 

 

 

 

 

 

 

 

Gross margin

30.6%

33.7%

 

35.0%

36.5%

 

35.9%

 

SG&A as % of revenue

51.6%

18.7%

 

38.5%

13.2%

 

9.6%

 

EBIT margin

-21.0%

15.1%

 

-3.4%

23.3%

 

26.2%

 

Effective tax rate

12.3%

12.3%

 

20.8%

27.0%

 

11.0%

 

NPAT-MI margin

125%

51.9%

 

72.9%

26.3%

 

23.6%

 


Source: Company’s financial statements, VCSC forecasts (dated June 1, 2021)