Workers at a construction site in Ho Chi Minh City.
Photo by VnExpress/Thanh Nguyen. 

Construction giant Coteccons has reported a 53 percent fall in post-tax profits last year, saying general difficulties in the industry have squeezed margins. 

The 2019 financial results released by the company recently shows post-tax profits of VND710 billion ($30.66 million), with revenue having fallen 17 percent year-on-year to VND23.73 trillion ($1.03 billion).

Post-tax profits in the final quarter of 2019 also fell 27 percent year-on-year, with revenue slipping 4.5 percent and various costs rising during the period. This is the fifth straight quarter that Coteccons has seen its profits decline.

According to the Coteccons management, the plunge in profits happened because some projects were taking longer than expected to complete, inflating fixed costs, while pressure from competitors in the bidding process has driven prices down, especially in the context of there being less work in the industry this year.

Construction accounted for almost all Coteccons’ revenues, with a modest amount coming from renting construction equipment, offices and sales of materials.

On the Ho Chi Minh Stock Exchange, Vietnam’s main bourse, Coteccons’ shares (CTD) fell over 64 percent during 2019. CTD had opened with a price of VND156,000 ($6.74) per share in January, but closed at just VND56,000 ($2.42) by the year-end, and has continued to lose in most sessions this year.

According to various reports by real estate consultancies, Vietnam’s real estate sector, a major source of construction work, slowed down last year, with regulatory bottlenecks obstructing the approval of new housing projects.

Latest figures from the Ho Chi Minh City Real Estate Association showed a 53 percent decline in new apartment supply in the first 9 months of 2019 in Ho Chi Minh City, Vietnam’s biggest housing market, while the number of newly approved projects fell 72 percent year-on-year.