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Pruksa slashes targets for 2011

Leading property firm Pruksa has lowered its revenue target for this year by Bt7-Bt8 billion from Bt30 billion, taking into account the negative impact of the floods in the current fourth quarter.

The company’s presales target has also been dropped to Bt30 billion from Bt42 billion, Pruksa president and chief executive officer Thongma Vijitpongpun told a news conference yesterday.

The company’s net-profit margin is also expected to drop significantly from 14.9 per cent of total revenues last year to 13 per cent this year.

“We have revised down our financial result because of the flood impact on our performance in the final quarter of this year, although our results in the third quarter were better than during the same period last year,” he said.

The company reported revenue of Bt18.7 billion and net profit of Bt2.48 billion in the first nine months of this year, up 14 per cent and 2 per cent respectively year on year.

The setback this year may have an impact on the company’s five-year plan to achieve total revenue of Bt100 billion in 2017, he said.

“We will have to revise our overall business plan for the future after the flooding situation ends,” he said.

The company has cut back on its overseas-investment plans in India and Vietnam. It has suspended plans to buy land at this time, taking its liquidity situation into account because of the missed targets, he said.

He added that the company had made changes to its construction process for after the floods. Landfill for its residential projects will be higher than the main road and above the possible flood level. That will increase its construction costs by 1.5-3 per cent, an increase that will be reflected in the price of it homes.

Pruksa director and chief business officer Prasert Taedullayasatit said the company had cut the number of new residential projects from 78, worth more than Bt60 billion, to only 49 this year. Of the total, 46 projects were launched in the first nine months, while the other three will be launched in the final two months. The three new projects will be in Khon Kaen, Phuket, and Chaeng Wattana Road in Bangkok.

“Twenty-nine residential projects worth about Bt20 billion will be launched next year but the location might be changed based on home-buyers’ preferences in the aftermath of the floods,” he said.

He added that the company had lowered its targets for presales and revenue this year as some customers had delayed their decision to take possession of their homes.

Currently, the company has a total backlog – projects already sold and waiting to transfer to the customer – worth Bt15 billion. About 18 per cent of the total, worth about Bt5 billion to Bt6 billion, faced flood impacts.

The company has budgeted more than Bt10 million to help existing customers nationwide.

Meanwhile, Pruksa has delayed its issue of debentures worth Bt5 billion from this month to next year, said the company’s chief financial officer, Somboon Wasinchutchawal.

Source: The Nation

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