Bangkok--15 Aug--BrandComm Consultants
HEMARAJ — INCREASE 2011 LAND SALES TARGET TO 1,700 RAISECOND QUARTER 2011 NET PROFIT OF BAHT 31.1 MILLION,FIRST HALF 2011 NET LOSS OF BAHT 1.9 MILLION DUE TO DEFERAL IN REVENUE RECOGNITION BASED ON NEW ACCOUNTING METHOD
Hemaraj Land And Development Public Company Limited announced its operating and financial results for the first half of 2011 as summarized below.
Net ProfitFor Quarter 2’2011, Hemaraj reported Total Net Income of Baht 31.1 million, or a decrease of 42% compared with the same period of last year adjusted. Earnings per-share was 0.003 Baht per share, representing a decrease of 46% from the same period of last year.
For the first 6 months of 2011, Hemaraj reported Total Net Loss of Baht 1.9 million, or a decrease of 100% compared with the same period of 2010 adjusted. The decrease of Net Income for the first 6 months of 2011 was partially due to the changing of accounting method from percent completion method to transfer of title method, based on new financial reporting standards issued by the Federation of Accounting Professions. In addition, there was an unrealized foreign exchange translation loss of Baht 108.8 million.
David Nardone, President and CEO of Hemaraj Land And Development Public Company Limited had the following comments on the company’s performance.
“Hemaraj continues our leading industrial estates sales, with customer investment from the automotive and industrial equipment industry resulting in 769 rai (307.6 acres) sold in the first half of 2011.
This includes the Caterpillar underground mining manufacturing plant of 140 rai (56 acres) and Caterpillar medium tractor manufacturing plants of 132 rai (52.8 acres) at Hemaraj Rayong Industrial Land to support their expansion in the Asia Pacific and Africa region. Industrial opportunities reflect the continued automotive production growth to a record 1,800,000 vehicles for 2011 (#12 global). There are further automotive initiatives underway in Thailand.
Including 27 contracts to date in 2011, we see continued industrial revenue growth opportunities this year and we have revised upwards our 2011 Industrial Estate Sales outlook again from 1,200 rai (480 acres) initially to now 1,700 rai (680 acres).
The lower industrial estate revenue recognized to date is due to a change in the accounting method in Thailand from 2011. Our expectations are for revenue recognition from industrial estates to be at more normal levels from Q3’2011 and for industrial estate recognized revenue results for 2011 to still exceed the original prior year.
This year we have significant capital investments in industrial estates, utilities, and new logistics parks while still preserving our strong liquid financial position. This includes the Baht 4.4 billion investment in our 35% shareholding in the Gheco-One IPP power project projected to operate in early 2012.
The Hemaraj broadened revenue with competing investment opportunities reduces the risk profile of the company. As the accounting recognition catches up with the business, this will be reflected by superior long term returns to shareholders.”
Revenue and Results of Operations for 6 months, 2011
Hemaraj was impacted by the change in accounting method in Thailand. For the first 6 months of 2011, Hemaraj’s Total Revenue was Baht 1,427.2 million compared with Baht 2,812.6 million for the same period of 2010, representing a 49% decrease. Total Operating Revenue from core businesses was Baht 1,328.8 million, a 55% decrease from the same period of 2010. Industrial Estate Land Sales for the first 6 months of 2011 including Profit from Associated Industrial Estate were Baht 422.9 million or a 74% decrease where 2010 reflected an unrealized foreign exchange translation gain. However, there is an additional Baht 1,453.08 million in deferred revenue, with recognition based on the transfer date, from Industrial Estate land sales not recognized to date, based on new financial reporting standards issued by the Federation of Accounting Professions from industrial estates developments and representing sales that will be recognized primarily over the next 3 to 12 months.
Industrial estate utilities increased to Baht 580.8, or an increase of 27% reflecting the higher volume and the consolidation of Hemaraj SIL and Hemaraj RIL. Total Utilities which includes industrial estate utilities, profit dividend from power utilities associates, and other utilities and services fees decreased to Baht 469.1 million, a decrease of 15% mainly due to the unrealized foreign exchange translation loss of Baht 108.8 million from Gheco-One in 2011 and unrealized foreign exchange translation gain of Baht 48.4 million in 2010. Total Rental Property and Services Revenue including ready built factory rental, pipe-rack rental, and commercial office rental increased to Baht 274.8 million, an increase of 18%. Sale of Property including ready built factory sales, residential sales and other land/property sales decreased to Baht 162 million, a decrease of 70%.
The Gross Profit was Baht 689.5 million, a 34% decrease from the same period of last year. Earning Before Interest Tax Depreciation and Amortization (EBITDA) were Baht 441.4 million. The Gross Profit Margin and EBITDA Margin were 48% and 31%, respectively.
Significant Activities for the first 6 months of 2011
- Industrial Estate Sales in the first 6 months of 2011 were 769 rai with 27 contracts, 17 new customers and 10 project expansions from existing customers. Hemaraj now has 443 distinct new customers with 670 contracts and 158 automotive customers with 239 automotive contracts.
- The decrease of Industrial estate revenue and property revenue has a lag in new revenue recognition and will be more normal in Q3’2011 and thereafter as titles transfer, which are reflected in the deferred revenue of Baht 1,453.08 million at the end of Q2’2011.
- Industrial estate utilities revenue increased 27% reflecting higher volume and the consolidation of Hemaraj SIL and Hemaraj RIL since Q4’2010.
- 10 Ready Built Factories rental contracts net were signed or 21,069 square meters. Ready Built Factories rental revenue increased 20% reflecting higher rental and occupancy.
Activities after Quarter 2, 2011
The Board of Directors has approved the interim dividends from the operating results from 1 January 2011 to 30 June 2011 at Bath 0.025 per share to be payable on 8 September 2011.
Balance Sheet Highlights for the 6-month period ended 30th June 2011
At 30th June 2011, Hemaraj reported Total Assets of Baht 18,134.2 million, Total Liabilities of Baht 9,327.1 million and Total Shareholders Equity of Baht 8,807.2 million. The Net Debt to Equity ratio was 0.77 to 1 with Cash and Deposits on Hand of Baht 3,008.4 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
[email protected]
BrandComm Consultants Co., Ltd.
Ms. Pailin Buranamittranond /
Ms. Bussakorn Nunthavichitra
Tel. 02 314 6877-9 Fax. 02 318 8847
www.hemaraj.com