Bangkok--3 Mar--Francom Asia
Hemaraj Land And Development Public Company Limited announced its operating and financial results for the year 2014 as summarized below.
Net Income
For Quarter 4’2014, Hemaraj reported Total Net Income of Baht 423.3 million, a decrease of 81% compared with the same period of the previous year. Net income in Q4’2014 decreased partially due to absence of extra gain on sale and lease under financial lease from Hemaraj Property Fund (HPF) booked in Quarter 4’ 2013 of Baht 1,458.6 million net of rental revenue reserve, income tax and minority interest. Earnings per-share was 0.044 Baht per share, representing a decrease of 81%. Normalized Net Income (NNI) for Quarter 4’2014 was Baht 503.9 million (excluding unrealized foreign exchange translation loss of Baht 80.63 million).
For the year of 2014, Hemaraj reported Total Net Income of Baht 2,960.6 million, and earnings per-share was Baht 0.305 per share, or a decrease of 32% compared with the same period of 2013.
For the year of 2014, Hemaraj recognized share of profit from power/utility associates (excluding foreign exchange unrealized translation gain/loss) at Baht 1,583.4 million, or an increase of 79% from the same period of 2013. There was an unrealized foreign exchange translation loss from Power Investment (Gheco-One and GJP NLL) of Baht 3 million compared to an unrealized foreign exchange translation loss of Baht 323.4 million in the same period of 2013. Therefore, Normalized Net Income (NNI) for year of 2014 was Baht 2,963.6 million, or a decrease of 36%.
David Nardone, President and CEO of Hemaraj Land And Development Public Company Limited had the following comments on the company’s performance.
“Hemaraj Land And Development Public Company Limited finished the year of 2014 with strong earnings. This is in consideration that revenue was lower being impacted from political disruptions, Board of Investment (BOI) delayed investment in early to mid 2014, the continued weakness in Thailand GDP and the domestic automotive market, and moderate export performance.
Our operating revenue in comparison with the prior year includes the Industrial Estate Land sales revenue, which had a strong sales and backlog from 2013, being lower by 27%, reflecting these aforementioned constraints. Rental Property was down 11% in consideration of the 2013 sale of factories to the Hemaraj Property Fund and lower manufacturing capacity demand. However, revenue from industrial estate utilities (non power) increased by 9% from the same period of 2013 due to pricing, product mix and volume growth. Industrial Estate Utilities volume demand increased 4% by volume in comparison from the average 2013 volume.
Industrial Estate land sales for 2014 were 665 rai (266 acres or 106 hectares), with 42 contracts, 31 new customers and 11 project expansions from existing customers. Seventy percent of the contracts in 2014 were non automotive.
The industrial estate land sales exhibit the continued weakness in the domestic automotive market with total automotive OEM production volume down 23% through 2014. Export auto OEM growth was flat in volume, however inclusive of auto parts increased 6.4% in value. There continues to be longer term new product launch or technology intensive automotive investments. Increasingly Hemaraj is the choice of leading multinational investment. The ECO Car 2 program applications were approved for five (5) Hemaraj automotive OEM manufacturers.
2014 Investment Approval projects by the Board of Investment (BOI) were Baht 729 billion, a decrease of 18% compared to the same period of 2013. BOI 2014 net applications submitted, reflecting revised privileges in 2015, were 3,469 projects and a value of Baht 2,192.7 billion. This increased 73% in terms of project numbers and 117% in terms of value, being the highest ever.
In 2014, Ready Built Factories increased net 8,522 square meters, totaling 302,070 square meters under rent inclusive of the Hemaraj Property Fund. Hemaraj Logistics Parks for Rent increased net 10,290 square meters or 14% from 2013 cumulative balance.
In Power, Gheco-One, a 660 MW IPP (Independent Power Producer) coal project with Hemaraj 35% shareholding and Glow Energy 65% (GDF Suez group), operated at 95% commercial dispatch availability in 2014, exceeding our operating and financial expectations. Hemaraj is investing in another seven (7) 126 MW SPP (Small Power Producer) projects with 25.01% equity in the first quarter of 2015.
Hemaraj’s financial status remains strong. In November 2014, TRIS Rating upgraded the company from “A-” to “A”, highlighting the shift in Hemaraj’s earning structure towards more predictable revenues.
Hemaraj has broad based revenue in core business areas: - industrial estates, utilities, power, ready-built factories and logistics parks. Our 2014 operating and financial results with the increasingly predictable Hemaraj earnings, despite a difficult economic environment, demonstrate the leverage from these investments. Our strategy remains to provide superior long term returns to shareholders.”
Revenue and Results of Operations for the Year of 2014
For the year of 2014, Hemaraj Total Revenue was Baht 6,333.1 million compared with Baht 8,769.6 million for the same period of 2013, representing a 28% decrease. Total Operating Revenue from core business was Baht 6,426.3 million, a 27% decrease from the same period of 2013. Industrial Estate Land Sales for 2014 were Baht 3,445.9 million, or a 40% decrease, with a gross margin of 53%. The backlog in deferred revenue is Baht 1,312 million, with recognition based on the title transfer date, from Industrial Estate land sales not recognized to date representing sales that will be recognized primarily over the next 3 to 12 months.
Industrial estate utilities increased to Baht 1,712.5 million, or an increase of 9%, reflecting the higher utility volumes, mix and rates. Total Utilities which includes industrial estate utilities, dividend from power utilities associates, and other utilities and services fees increased to Baht 1,844.8 million, an increase of 12%.
Total Rental Property and Services Revenue including ready built factory rental, logistics parks rental, pipe-rack rental, and commercial office rental decreased to Baht 901.3 million, a decrease of 11%. This was mainly from the decrease in Ready Built Factory Rental of Baht 164.8 million, lower by 27% reflecting the sale of factories to the Hemaraj Property Fund at the end of 2013 and lower manufacturing capacity demand. However, Logistics Parks Rental improved Baht 42.1 million, an increase of 42% and Commercial Office Rental also improved Baht 18.8 million, an increase of 24% due to higher occupancy rates. Sale of Residential decreased to Baht 234.2 million, a decrease of 44%.
The Gross Profit was Baht 3,126.7 million. Earnings before Interest Tax Depreciation and Amortization (EBITDA) were Baht 2,779.6 million for 2014. The Gross Profit Margin and EBITDA Margin were 49% and 44%, respectively.
Significant Activities for the Year of 2014
- Industrial Estate Land Sales were 665 rai with 42 contracts, 31 new customers and 11 project expansions from existing customers. Hemaraj now has 646 distinct new customers with 975 contracts including 224 automotive customers with 342 automotive contracts.
- Ready Built Factories increased net 8,522 square meters totaling 302,070 square meters under rent. This comprises of 192,252 square meters at Hemaraj companies and 109,818 square meters rented under the 2013 year-end Hemaraj Property Fund (Hemaraj 23.12% share).
- Hemaraj Logistics Parks for Rent increased net 10,290 square meters or 14% from 2013 cumulative balance, totaling 82,435 square meters under rent.
- Gheco-One, a 660 MW IPP coal project with Hemaraj 35% shareholding and Glow Energy 65% (GDF Suez group), operated at 95% commercial availability.
Balance Sheet Highlights for the 12-month period ended 31th December 2014
At 31th December 2014, Hemaraj reported Total Assets of Baht 33,682 million, Total Liabilities of Baht 18,653 million and Total Shareholders’ Equity of Baht 15,029 million. The Net Debt to Equity ratio was 1.10 to 1 with Cash and Deposits on Hand of Baht 2,087 million.
For further information concerning Hemaraj Land And Development Public Company Limited (SET symbol Hemraj), please visit our website at www.hemaraj.com or www.theparkresidence.co.th or contact us by email at invest@hemaraj.com