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AP raises 2009 target by 10%
By admin | June 5, 2009
Source - Bangkok Post Website
May 25, 2009
CEO: Sentiment begins to improve
Listed developer Asian Property Development Plc (AP) has raised its 2009 revenue target by 10% and will launch 12 projects worth a total of 21.27 billion baht by the first quarter of 2010.
Market sentiment improved in May, despite the riots in mid-April, said CEO Anuphong Assavabhokhin. Surprisingly, the number of customers visiting project sites did not fall in the first week following the protests, he added.
“We didn’t dare launch new projects in the first two months, as the market had been bad since late last year,” he said.
“Now until the first quarter next year, AP will launch new projects each month - seven condominium projects worth 13.9 billion baht and five low-rise projects worth 7.37 billion.”
With the improved outlook, AP is aiming for 10 billion baht in revenue by the year-end, 10% higher than a previous target of 8.5-9 billion baht.
But Mr Anuphong said revenues could fall by as much as 10% from its earlier target if the market deteriorates and risks from the US and from Thailand’s economy and political situation flare anew.
“The positive outlook is really limited only for large developers, which are advantaged and tend to expand market share. They have stronger financial status and get better offers from banks. The market today rarely opens for small and medium-sized developers,” he said.
Competition in the financial markets has increased, he said. But, while many banks are offering better conditions, some developers - mainly small and medium-sized companies - have found it harder to get project loans and mortgages loans for their customers.
The financial statements of many large developers improved substantially in the first quarter from the fourth quarter last year, said Mr Anuphong.
AP’s sales doubled on the same period last year to 2.8 billion baht with net profit up 217% to 481 million. Gross margin was 34% while pre-sales from January to May 18 were 2.5 billion baht.
Chief marketing officer Visanu Suchatlumpong said only large developers would remain in the market. But he forecast that employees’ skills would replace funding as the key to success. Developers with teams that are quicker to adapt and more dynamic in catching market trends will perform better.
“Mid- and smaller-sized developers have obstacles in business expansion,” he said.
“They need to change implementation, management and internal process. To grow, diversification in product segmentation and location is a must.”
AP has a budget of 4 billion baht for buying land plots and has already spent 700 million baht in the first four months. Despite this aggressive plan, though, it will aim to maintain its debt to equity ratio at not more than one time.
To date, AP has a sales backlog of 11.8 billion baht, of which 9.6 billion is from condominiums and 4 billion will be realised this year.
Shares of AP closed at 3.90 baht yesterday, up 18 satang, in trade worth 172.49 million baht.
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