On April 18, 2023, Viettel Construction Corporation (Viettel Construction) held the Annual General Meeting of Shareholders in 2023. At the ceremony with the participation of Mr. Do Manh Hung - Chairman of the Board of Directors of Viettel Construction; Mr. Pham Dinh Truong – Member of the Board of Directors cum General Director; together with members of the Board of Directors, Deputy General Directors and Directors, Heads of Agencies Division of the Corporation.
Mr. Do Manh Hung - Chairman of the Board of Directors of Viettel Construction
The meeting approved the profit distribution plan in 2022 with a dividend rate of 31.51% (including 10% in cash and 21.51% in shares). Based on the result of consolidated revenue in 2022 reaching VND 9,398 billion, completing 109% of the plan, increasing by 26% compared to the same period in 2021. Profit after tax reached VND 443 billion, completing 107% of the plan, increasing 18% growth over the same period in 2021.
Mr. Pham Dinh Truong – Member of the Board of Directors cum General Director
At the meeting, shareholders of Viettel Construction unanimously approved the plan with the goal of total consolidated revenue in 2023 reaching 10,338 billion dong; consolidated profit after tax reached 487 billion dong, both increased by 10% over the same period. The parent company's total revenue reached VND 9,256 billion, the parent company's profit after tax reached VND 471.6 billion; ROE reached 26.4%.
Accordingly, the specific key tasks Viettel Construction will perform in 2023 with the following areas:
Field of Operation and Mining:
– Improve quality, shorten the time to deploy new fixed broadband services to customers, to increase competitiveness and retain customers.
– Target revenue of 5,354 billion VND, up 9% compared to 2022.
Investment in infrastructure for lease:
– Holding the position of TowerCo No. 1 in Vietnam. Deploy new construction of 2,500 BTS stations, raising the sharing rate to 1.04.
– Revenue of VND 472 billion, an increase of 50% compared to 2022.
Building sector:
– Expanding business space into technical infrastructure, industrial park infrastructure, budget projects (Ministry of Defense, Ministry of Public Security, local budget). Completing the capacity foundation for various types of construction, large and key projects such as airport projects, seaport projects, social housing, etc.
– Implementing the policy of “Building B2C is the foundation, SME is development”.
– Revenue of 3,082 billion VND, up 29% compared to 2022.
Integrated Solution Area:
– Focus on key products (electro-mechanical solutions for factories and buildings; transmission & EMS systems for industrial parks; solar solutions, smart solutions; new rural areas;...).
- Minimum target revenue of 1,045 billion VND.
Technical Services:
– Providing reliable services to businesses and households with 04 main products: Home Services, Solar Services, IT Services and Operation Services.
– Target revenue of 354 billion VND, up 15% compared to 2022.
The General Meeting also approved the dismissal of Ms. Nghiem Phuong Nhi from the position of Member of the Board of Directors for the term 2021-2025 and elected to replace one member of the Board of Directors, Ms. Vu Thi Mai, Head of the Organization and Human Resources Department of Viettel Group.
Within the framework of the program, the Presidium answered and shared information of Viettel Construction through online and face-to-face questions:
Question 1: Why does the operation and exploitation contract signed with Viettel Telecommunications Corporation (VTT) increase in value over the years while the contract signed with Viettel Network Corporation (VTNet) does not increase? ?
Answer:
Viettel Construction currently has 02 domestic contracts:
– Operation, exploitation and rescue of station and cable line information signed with VTNet.
– Service of managing subscriber lines signed with VTT.
The annual number of stations does not increase significantly, so the value of the operating contract with VTNet does not increase. While the annual subscriber line increases by 5-7%, the contract value signed with VTT increases accordingly. Mining operation contracts in foreign countries are independent from domestic ones. Revenue from operation and exploitation in 2022 in Vietnam is more than 4,000 billion and abroad is 800 billion.
Mr. Do Manh Hung - Chairman of the Board of Directors chaired the discussion
Question 2: What is the competitive advantage of CTR in B2C construction compared to local small units/contractors?
Answer: Viettel Construction executes a package house construction contract. Advantages of the Corporation: Having human resources in 63 provinces and cities; have resources in terms of process, management, capital; have a partner ecosystem (material suppliers, subcontractors); assist customers in applying for construction permits. We can also work with banks to lend to customers.
Question 3: How many Macro/RRU/Smallcell stations does CTR currently own? How much is the revenue and investment rate per station?
Answer: The Macro and RRU stations of Viettel Construction currently account for more than 90% of the total number of stations, the rest are smallcells. Revenue and investment rate will depend on the type of station.
Question 4: Why did the number of customers decrease in the technical service segment but tripled in revenue?
Answer: In 2022, Viettel Construction promotes development with B2B customers, so even though the number of works decreased, the revenue increased 3 times. Currently, B2B and B2C revenue is equal and Viettel Construction will maintain the ratio 50-50% because these two parts support each other.
Question 5: Why does the number of BTS stations for lease in 2022 increase sharply but the revenue does not increase accordingly?
Answer: The rental price of BTS station consists of 2 parts: Infrastructure rental (station/column/house) and source rental. Therefore, the revenue will depend on the rental composition of each station.
Mr. Pham Dinh Truong - General Director answered questions from shareholders
Question 6: Will rising raw material prices affect CTR's construction profit? Are personnel in the B2C construction field an employee of the company or outsourced?
Answer: Main materials are purchased by the Corporation with major suppliers. For other materials, there is planning and assessment of local suppliers to control input costs. At the branches, we have a force of architects as designers and engineers to run and manage the construction. For the construction part, we choose a subcontractor or a team of workers to follow the company's process and standards. Contractors of the Corporation must be granted certificates of the Corporation and work safety.
Question 7: What is the profit margin of the civil construction segment? What are the risks of this array?
Answer: The profit margin in 2022 is from 5% - 6%. We have a closed product ecosystem from consulting, design, construction, solutions, products, so we will save on general management costs to increase profits. This segment is completely risk-free because we only build after receiving the money.
Question 8: What is the share rate in Towerco segment for the year 2023-2025?
Answer: The 2023: 1.04 and 2025 shared rate target is 1.05.
Question 9: Is there any risk when the company invests in a rental BTS station without owning the accompanying real estate?
Answer: We are renting land to invest in rental stations. Buying land to invest in BTS for lease is not suitable and increases the payback time.
Question 10: Did the leadership share more about the 5G frequency auction progress?
Answer: This is the story of telecommunications businesses, telecommunications carriers, the Ministry of Information and Communications and managers. We also want the frequency auction to be accelerated.
Question 11: Does the company participate in the construction of industrial parks, high-rise buildings and airports?
Answer: The company is researching and participating in a number of high-rise buildings and industrial parks.
Question 12: Difficulties in the ICT sector?
Answer: The difficulty of the ICT sector is the general difficulty of the economy. However in difficulties and come opportunities for good businesses. The company this year focuses more on the electromechanical segment working with the project owner.
Answer: The difficulty of the ICT sector is the general difficulty of the economy. However in difficulties and come opportunities for good businesses. The company this year focuses more on the electromechanical segment working with the project owner.
Answer: The Corporation's debt comes from two parts: Short-term loans to serve working capital needs, but corresponding to this loan is the amount of long-term deposits to increase financial profit. Long-term loans for investment in rental infrastructure.
Question 14: Customer outstanding balance from construction activities tends to increase, revenue is small, construction is a low profit margin segment, how does the company manage receivables from customers? Especially the receivables of Hoang Mai Urban Development Investment Joint Stock Company.
Answer: Outstanding loans from construction activities increased due to strong increase in construction revenue, these debts are still complying with signed contract terms. Regarding the management of receivables, the company has implemented a number of measures: guaranteeing bank payments, breaking up contracts for quick payment settlement. In addition, the Company when signing construction and installation contracts, evaluates the capability of the Investor.