Bangkok--11 Nov--BrandComm Consultants
HEMARAJ — 2011 LAND SALES TARGET REAFFIRMED AT 1,700 RAINO IMPACT FROM FLOODING9 MONTHS 2011 NET PROFIT OF BAHT 152 MILLION
Hemaraj Land And Development Public Company Limited announced its operating and financial results for the first 9 months of 2011 as summarized below.
Net Profit
For Quarter 3’2011, Hemaraj reported Total Net Income of Baht 154.5 million, or a decrease of 56% compared with the same period of last year adjusted. Earnings per-share was 0.0159 Baht per share, representing a decrease of 56% from the same period of last year.
For the first 9 months of 2011, Hemaraj reported Total Net Income of Baht 152.6 million, or a decrease of 87% compared with the same period of 2010 adjusted. The decrease of Net Income for the first 9 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 182.1 million.
David Nardone, President and CEO of Hemaraj Land And Development Public Company Limited had the following comments on the company’s performance.
“Subsequent to the close of the quarter, Thailand is experiencing unprecedented flooding in the north central area and the northern part of Bangkok. Fortunately, this has had no direct impact at all on the industrial estates of Hemaraj or to any of our 689 land or factory customers, due to our strategic locations and land elevations. The flooding is resulting in some limited supply line disruptions to our automotive and other customer base. During this, we are implementing our backup operation procedures for our Bangkok office with our Rayong Eastern Seaboard office. We are operating normally though providing assistance to a number of employees experiencing disruptions from the flooding. In addition, we are assisting our industrial estate colleagues with technical support to get them back running as well as extensive community and government support with policy, financial, technical, and employee programs.
In terms of our business, Hemaraj continues our leading industrial estates sales, with customer investment from the automotive and industrial equipment industry resulting in 1,212 rai (485 acres or 196 hectares) sold in the first 9 months of 2011.
The automotive production for Thailand, due to the supply line disruptions noted, will result in a lower forecast for 2011 vehicles now projected at 1,600,000 vehicles, down from an earlier forecast of 1,800,000 vehicles (#12 global). Most auto OEM’s will recover in early 2012 to normal levels.
Including 46 contracts to date in 2011, we see continued industrial revenue growth opportunities this year. We reaffirmed our 2011 Industrial Estate Sales outlook again from 1,200 rai (480 acres, 194 hectares) initially to now 1,700 rai (680 acres, 275 hectares).
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.
We are also continuing capital investments in industrial estates, utilities, ready built factories and Hemaraj Logistics Park 1 while still preserving our strong financial position. This includes the Baht 4.4 billion investment in our 25% shareholding in the Gheco-One IPP power project projected to operate in early 2012.
With the continued growth in industrial estate utilities and property rental, the broadened revenue is reducing the risk profile of the company. The accounting recognition, based on land transfers, will continue to catches up with the business and to properly reflect the superior long term returns to shareholders.”
Revenue and Results of Operations for 9 months, 2011
Hemaraj was impacted by the change in accounting method in Thailand. For the first 9 months of 2011, Hemaraj’s Total Revenue was Baht 2,605.3 million compared with Baht 3,399.5 million for the same period of 2010, representing a 23% decrease. Total Operating Revenue from core businesses was Baht 2,432.0 million, a 37% decrease from the same period of 2010. Industrial Estate Land Sales for the first 9 months of 2011 including Profit from Associated Industrial Estate were Baht 920.6 million or a 46% decrease. However, there is an additional Baht 1,854 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 880.0, 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 691.0 million, a decrease of 38% mainly due to the unrealized foreign exchange translation loss of Baht 182.1 million from Gheco-One in 2011 and unrealized foreign exchange translation gain of Baht 360.9 million in 2010. Total Rental Property and Services Revenue including ready built factory rental, pipe-rack rental, and commercial office rental increased to Baht 427.1 million, an increase of 22%. Sale of Property including ready built factory sales, residential sales and other land/property sales decreased to Baht 393.3 million, a decrease of 41%.
The Gross Profit was Baht 1,237.4 million, a 4% decrease from the same period of last year. Earning Before Interest Tax Depreciation and Amortization (EBITDA) were Baht 866.0 million. The Gross Profit Margin and EBITDA Margin were 47% and 33%, respectively.
Significant Activities for the first 9 months of 2011
- Industrial Estate Sales in the first 9 months of 2011 were 1,212 rai with 46 contracts, 30 new customers and 16 project expansions from existing customers. Hemaraj now has 456 distinct new customers with 689 contracts and 162 automotive customers with 246 automotive contracts.
- The decrease of Industrial estate revenue and property revenue has a lag in new revenue recognition and will be more normal from Q3’2011 and thereafter as titles transfer, which are reflected in the deferred revenue of Baht 1,854 million at the end of Q3’2011.
- Industrial estate utilities revenue increased 27% reflecting higher volume and the consolidation of Hemaraj SIL and Hemaraj RIL since Q4’2010.
- 14 Ready Built Factories rental contracts net were signed or 29,679 square meters. Ready Built Factories rental revenue increased 27% reflecting higher rental and occupancy.
Balance Sheet Highlights for the 9-month period ended 30th September 2011
At 30th September 2011, Hemaraj reported Total Assets of Baht 18,077.4 million, Total Liabilities of Baht 9,347.2 million and Total Shareholders Equity of Baht 8,730.2 million. The Net Debt to Equity ratio was 0.81 to 1 with Cash and Deposits on Hand of Baht 2,725.8 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]
For more information, please contact:
BrandComm Consultants Co., Ltd.
Ms. Pailin Buranamittranond /
Ms. Kornnika Berananda
Tel. 02 314 6877-9 Fax. 02 318 8847
www.hemaraj.com