Ocean Group Joint-Stock Co., a Vietnamese real-estate and financial company, reduced its 2011 pretax profit target by 54 percent as a slump in the property market hurt its business.
The Hanoi-based company lowered pretax profit target this year to VND380 billion (US$18 million) from its earlier forecast of VND825 billion, Chairman Ha Van Tham said in an interview on Friday. Ocean Group also reduced its revenue estimate to VND2 trillion from VND3 trillion, he said.
"The economic situation will continue to be difficult as the tight monetary policy will still be maintained to curb inflation," Tham said. "Therefore, the earnings adjustment is needed to make it in line with the real situation."
Vietnam's property market has "slowed down" as higher interest rates made it difficult for potential buyers to finance purchases, according to CapitaLand Ltd., Southeast Asia's biggest property developer.
The nation's inflation rate in October reached 21.59 percent, the highest among 17 Asian economies tracked by Bloomberg. The central bank has increased its refinancing rate to 15 percent from 9 percent at the beginning of the year, while Fitch Ratings said in August lending costs for some businesses in July were as high as 25 percent.
Shares of Ocean Group, whose businesses include investment consulting, hotels and media, has slumped 53 percent so far this year, compared with the 15 percent decline in the benchmark VN Index. In 2012, Ocean targets profit and revenue to rise as much as 25 percent from the current-year results, the chairman said.
Vietnam's economic growth slowed in the first three quarters this year after the government pushed up borrowing costs. For the nine months through September, the economy expanded 5.76 percent, down from 6.54 percent in the first three quarters of 2010, the General Statistics Office said Sept. 24.