A Coteccons tower crane at a construction site. Photo courtesy of Coteccons

HCM CITY — Coteccons Construction JSC (HoSE: CTD) plans to seek shareholder approval for a 25 per cent cash dividend at its upcoming annual general meeting, after profit grew nearly twice as fast as revenue in fiscal year 2026.

The contractor reported revenue of VNĐ34.34 trillion for the fiscal year, up 38 per cent, while profit after tax rose 73 per cent to VNĐ788 billion. Net profit margin improved to 2.3 per cent.

Operating cash flow turned around from a negative VNĐ1.2 trillion to more than VNĐ800 billion. The company’s cash position reached nearly VNĐ8 trillion, while receivables remained broadly stable despite the strong increase in revenue.

“These results show that revenue growth is being converted more effectively into profit, cash flow and balance-sheet strength,” said Đinh Thị Hồng Thắm, the company’s corporate secretary and authorised spokesperson for information disclosure.

She said the board of directors had considered capital requirements for core operations, construction capabilities, technology, human resources and the fiscal year 2027 growth plan before deciding to put the dividend proposal to shareholders.

The proposal represents a shift towards a more balanced approach between reinvesting for growth and sharing value with shareholders, she added.

Governance gains

Thắm said corporate governance was the foundation for the company’s greater confidence in sharing value with shareholders.

Đinh Thị Hồng Thắm, corporate secretary and authorised spokesperson for information disclosure at Coteccons. Photo courtesy of Coteccons

In the latest Vietnam Sustainability Index (VNSI) assessment conducted by the Ho Chi Minh Stock Exchange (HoSE), Coteccons achieved an overall environmental, social and governance (ESG) score of 84 per cent, its highest across all assessment periods.

Its governance pillar score reached 81 per cent, up 10 percentage points year-on-year and well above both the industry average of 53 per cent and the VN100 average of 61 per cent.

The company’s capital allocation is guided by three principles: supporting sustainable growth, maintaining a healthy balance sheet and sharing value with shareholders when conditions allow, according to Thắm.

“This discipline makes dividends a natural outcome of an efficient operating system, rather than a short-term objective,” she said.

The proposed 25 per cent payout is a milestone rather than a commitment to pursue the highest possible payout in any single year, she said. Over the long term, Coteccons is working towards an annual cash dividend of 10-15 per cent while balancing reinvestment needs and shareholder returns.

“What we want to build is the capacity to deliver sustainable and consistent payouts over many years,” Thắm said.

From ‘Sales Mode’ to ‘Saving Mode’

Four to five years ago, Coteccons faced what Thắm described as a “double crisis”: the severe impact of COVID-19 and disruption at the leadership level. With almost no new contracts, the company was operating at only around 70-80 per cent of capacity.

It responded with what it calls “Sales Mode”, expanding its market, rebuilding customer trust and securing enough work for the whole system to operate effectively again.

Since then, revenue has grown at a compound annual rate of 30-40 per cent and economies of scale are beginning to take effect, prompting a shift in strategic focus to “Saving Mode”, or extracting greater efficiency from the platform the company has built.

“It does not mean scaling back our ambition, tightening the belt or applying mechanical cost cuts,” Thắm said. “Coteccons still aims to grow, but not by winning more projects at any cost.”

The priority is to use resources more efficiently, reduce waste, optimise design, materials and construction solutions, shorten delivery timelines, control costs and manage cash flow more effectively, she said.

The objective is not a one-off cost-saving exercise but a lasting culture of efficient resource use across the organisation, from tendering, procurement and construction to office operations and ESG practices, she added.

Moving from growth to Quality Growth

Coteccons sees significant headroom from three growth drivers: urbanisation, including public investment and infrastructure; industrialisation; and its Go Global strategy. Together, these underpin its ambition to deliver annual profit growth of 25-30 per cent over the medium term.

Thắm said the focus was not simply on scale. Coteccons is moving from growth to Quality Growth, the company prioritises projects with sound legal status, reasonable margins and a strong fit with its capabilities and risk appetite, while strengthening working-capital control and improving productivity so that return on equity (ROE) can improve sustainably.

Coteccons also has a roadmap to raise its foreign ownership limit to 100 per cent, which Thắm said would create broader opportunities for international investors to participate in the company’s long-term growth.

“This is not only about ownership capacity; it is also a step towards improving access to international capital, broadening our institutional investor base and strengthening CTD’s position in the capital market,” she said.

Investor relations activities will continue to focus on improving share liquidity and enhancing the stock’s eligibility for international indices and global capital flows, she said.

“The 25 per cent cash dividend is more than a profit-distribution decision. It signals that Coteccons is entering a new phase, one defined by stronger governance, higher capital efficiency, better-quality growth, greater openness to international investors and greater value sharing with shareholders,” Thắm said. — VNS