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Kinh Bac City Says First-Quarter Net Declines 80 Percent

May 26 (Bloomberg) -- Kinh Bac City Development Share Holding Corp., Vietnam’s third-largest listed property company, said first-quarter profit fell 80 percent to 51.2 billion dong ($2.5 million) as borrowing costs gained and revenue fell.

Revenue dropped 59 percent from a year earlier to 213 billion dong in the three months to March 31, according to a statement on the company’s website today. Financial costs, including interest payments, increased 74 percent to 74.6 billion dong in the period, the statement said.

Vietnam’s central bank on May 17 boosted the repurchase rate for the sixth time this year to curb inflation that’s surged to the fastest pace since 2008. Prices rose 19.78 percent in May, according to the General Statistics Office in Hanoi.

Interest-rate payments have become a “major component” of production costs for Vietnamese companies, VinaCapital Investment Management Ltd. said on May 23. “High interest rates are killing the smaller companies,” said Alan Pham, chief economist at VinaCapital.

Kinh Bac City, which is based in Bac Ninh province, near Hanoi, said earlier it was targeting full-year profit of 1 trillion dong. In 2010, profit was 1.1 trillion dong.

To contact Bloomberg News staff on this story: Nguyen Kieu Giang in Hanoi at giang1@bloomberg.net

To contact the editor responsible for this story: K. Oanh Ha in Hanoi at Oha3@bloomberg.net

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