Wednesday, June 17, 2009

Thailand' Developer's 'big profit fall'

Property Perfect expects its net profit to slump 39 per cent this year on lagging condominium sales and thinning gross margins, according to DBS Vickers Ballas Securities.

Executives of the residential developer were quoted as telling a "meet the analysts" briefing on Tuesday that earnings were expected to swing back to 5-per-cent growth next year thanks to improving gross profit margins.

The Krungthep Turakij business daily cited an analyst of Siam City Securities as forecasting net profit slipping 45.6 per cent this year from Bt438 million last year, due to the fall-off in housing demand and dwindling condo backlog.

It said Property Perfect should report a 5.6-per-cent decline in revenue from Bt7.1 billion last year.

A planned launch of three condo projects with a combined 2,737 units worth Bt6.2 billion would also require more funds, the analyst said.

The company is raising Bt1 billion through issuing bonds this year.

DBS also quoted the executives as saying the company's sales in the second quarter could reach Bt1.8 billion, a slight increase from Bt1.5 billion in the first quarter, due to the launch of the three projects. However, the Bt3.3 billion in sales in the first half accounts for only 41 per cent of its whole-year target of Bt8 billion. Perfect has fixed its land procurement and construction budget at Bt3 billion for this year and Bt4.5 billion for next year.

It plans another issue of bonds worth Bt1.2 billion to finance the land purchases.

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