The Ho Chi Minh City-based company reported a net profit of VND13.7 billion ($531,230), supported by a substantial gain from the transfer of its stake in an associate.

Financial deal completed on the final day of the quarter

According to its consolidated financial statements for the third quarter of 2026, Phat Dat reported net revenue of VND24 billion ($930,580), down sharply from VND507 billion in the same period last year. The decline was mainly due to projects still under development that had not yet reached the stage at which revenue and profits could be recognized.

While revenue fell, interest expenses and corporate management costs surged. The company said interest expenses rose from VND74.2 billion to VND180 billion ($6.98 million), mainly due to an increase in outstanding borrowings during the period to finance the acquisition of a 35% stake in Lotte Properties HCMC, as part of efforts to expand its land bank and add a strategic project to its portfolio.

Corporate management expenses also climbed from VND46.7 billion to VND241 billion ($9.34 million), primarily due to the recognition of VND174.17 billion ($6.75 million) in provisions under the prudence principle. Excluding this provision, management expenses would have stood at around VND67 billion ($2.6 million), up 43.5% year-on-year due to business expansion.

Meanwhile, other activities recorded a loss of VND112.7 billion ($4.37 million), compared with a loss of VND6.3 billion in the same period last year. According to the company's explanation, the expenses mainly arose from funding the construction and commissioning of Binh Chuan 3 Primary School.

With its core real estate business yet to generate significant revenue, financial income became the decisive factor enabling Phat Dat to remain profitable in Q3. Financial income reached approximately VND710 billion ($27.53 million), surging from VND1.7 billion a year earlier.

The income mainly came from a VND662.57 billion ($25.69 million) gain on the transfer of a 49.95% stake in Hoa Phu Investment and Development Real Estate JSC on September 30, 2026, and a VND46.53 billion ($1.8 million) gain from the disposal of an investment.

Specifically, on September 30, 2026, Binh Duong Building, a Phat Dat subsidiary, completed the first phase of the transfer of 68.4 million shares, equivalent to 49.95% of the charter capital of Hoa Phu Building, to Thuan An 2 High-rise Real Estate Investment and Development Company Limited. The total transaction value was nearly VND1,881 billion ($72.93 million).

Binh Duong Building received the first payment of over VND1,567 billion ($60.78 million) over September 28 and 29. Notably, the transaction was completed on the final day of Q3, allowing Phat Dat to recognize a substantial disposal gain during the period.

Without the gains from the transfer and disposal of investments, Phat Dat's Q3 results would likely have slipped into a loss.

After recording pre-tax profit of approximately VND158 billion ($6.13 million) and current corporate income tax expenses of around VND141.4 billion, Phat Dat posted net profit of VND13.7 billion ($531,200), down 84% from Q3/2025.

For the first nine months of the year, the company's net profit reached VND231.7 billion ($8.98 million), up 5% year on year. However, it had achieved only 26.7% of its full-year profit target of VND868 billion.

To meet its target, Phat Dat needs to generate approximately VND636 billion ($24.66 million) in profit in Q4, nearly 2.75 times the amount earned in the first nine months. With no clear improvement in the real estate market and financial costs rising, the company's ability to meet its annual target may depend on restructuring its investment portfolio.

Borrowings 2.3 times higher than at the start of the year

Another notable development at Phat Dat has been the significant shift in its asset and capital structure. Total assets stood at VND38,225 billion ($1.48 billion) at the end of September, up VND10,955 billion from the beginning of the year and VND9,618 billion from the end of Q2.

The increase was driven mainly by investments in joint ventures and associates, which surged from VND710 billion to VND12,702 billion ($492.52 million), while short-term receivables and inventories both declined.

In Q3, Phat Dat recorded an investment of approximately VND10,393 billion ($402,99 million) in Lotte Properties HCMC Company Limited, equivalent to around 27% of its total assets at the end of September. The investment made Lotte Properties HCMC an associate of Phat Dat. The transaction was completed on August 11, 2026.

Lotte Properties HCMC is the developer of the Lotte Eco Smart City Thu Thiem project, located in functional subdivision 2A of the Thu Thiem New Urban Area in Ho Chi Minh City. The project covers approximately 7.45 hectares across six adjacent land plots, with a projected total investment of around VND60,000 billion ($2.33 billion).

Under the cooperation agreement, Phat Dat holds a 35% stake in the project entity and participates in the joint development of residential blocks 2-2, 2-4 and 2-6. The company will also directly develop two commercial tower blocks, 2-1 and 2-3, along with related commercial and service facilities.

Alongside the expansion of its asset base, Phat Dat's borrowings also rose sharply, from VND5,823 billion at the beginning of the year to VND13,638 billion ($528.8 million) at the end of September. This represented an increase of VND7,815 billion, or approximately 2.3 times the initial level.

The company's largest creditor is Military Commercial Joint Stock Bank (MB), with outstanding loans exceeding VND9,180 billion ($355.95 million). Of this amount, VND8,834 billion was used to finance the acquisition of an equity stake, enabling Phat Dat to secure its 35% ownership in Lotte Properties HCMC.

The loans used to finance the transaction have principal repayment schedules starting between 2030 and 2034, easing Phat Dat's short-term debt repayment pressure. However, the company must continue servicing interest payments while awaiting project development and future cash flows.

In Q3 alone, the company's interest expenses rose to VND180 billion ($6.98 million) from VND74.2 billion in the same period last year, an increase of approximately 2.4 times.

Phat Dat plans to offer 200 million shares to existing shareholders, targeting proceeds of VND2,000 billion ($77.55 million) to fund its investment and business activities. The plan was launched in July but has yet to be implemented.

On the stock market, PDR shares have been on a downward trend and are currently trading at around VND11,300 ($0.44) per share, down 57% over the past year. The decline has significantly undermined the attractiveness of the share offering.