Bangkok--19 Mar--CH. Karnchang
- THB 110,000 million worth of backlog
- New investment projects in neighboring countries to drive revenueand lessen dependence on local construction projects
CH. Karnchang Public Company Limited (CK), Thailand’s leader in the construction industry and investment in concession projects said today it is confident in future outlook for its business, despite the halt of the 2 trillion baht loans. The Company is unfazed as it currently has a backlog of more than 110 billion baht, more than 4 times the company’s annual revenue. In addition, it has other sources of income from its investments in subsidiary companies engaged in infrastructure projects in Thailand and neighboring countries.
Mr. Plew Trivisvavet, Chief Executive Officer of CH. Karnchang PLC, said, “The strong operating performance in 2013 clearly underlines the Company’s continuous growth that is driven by our successful business strategies, both for the construction arm and the investment arms of the group. CH. Karnchang’sunique business structure, covering both construction and concession investments, allows us to enjoy various sources of income and not to depend solely on government-generated or domestic projects. The Company’s subsidiaries’ projects and operations also contribute to the Company’s income. These various sources of income have mitigated risks from external factors that may have an impact on the construction business in Thailand. The THB 110,000 million backlog is from projects waiting for income recognition in the next 4-5 years. In addition, there is a number of projects for whichthe contracts will soon be signed. We are looking at around THB 30,000 million more income per year, with an 8-10% profit margin.”
As for the outlook for 2014, the Company is confident that its operating performance will achieve the target, both for the construction and investment arms. In terms of construction projects, the Company expects to sign contracts for various projects, including the THB 5,000 million Bang Pa-in co-generation power plant phase 2, the THB15,000 million Nam Bank hydropower plant in Lao PDR, the THB700 million Sky Train – Bearing-Samut Prakarn route expansion project, and extension of several existing projects. In addition, the Company is preparing to participate in the bidding for 3 projects – 1) Sky Train Project – Green Line (Mor Chit-Sapan Mai-Kukot) spanning 19 km; 2) Dual Track Train Project: Khlong 19- Kang Khoi; and 3) Suvarnabhumi International Airport expansion Phase 2. These project values total THB 85,000 million.
In addition to the construction projects, the Company expects all its subsidiaries to grow and generate more income for the Company. The subsidiaries include Bangkok Metro PLC, CK Power Co., Ltd.,Thai Tap Water Supply PLC, Bangkok Expressway PLC and Xayaburi Power Co., Ltd. They mostly invest in basic infrastructure systems that will constantly grow, especially the energy business where demand is climbing rapidly. CK Power PLC has several power projects on hands, including the Bang Pa-in Co-generation Power Plant Phase 2, Nam Bak hydropower plant in Lao PDR and Xayaburi hydropower plant in Lao PDR. CK Power is the Group’s flagship company in the energy business with very high growth potential as it is in rapidly growing industry and has high potential in developing multi-energy source projects in neighboring countries. CK Power also has the capability to contribute to risk management and generate a steady stream of income for the group.
“CH. Karnchang’s future strategy will be focused on expanding our income base from our investment business in parallel with the flagship construction business. We will increase our investment in projects in AEC countries in the future. These will enable us to mitigate risks from external factors that may have an impact on construction in Thailand. At present, we have considerable investments in the power industry in Lao PDR. We are also studying the feasibility of investing in other businesses, including construction projects in neighboring countries – Laos, Myanmar, Cambodia and Vietnam, that continue to have high growth potential,” said Plew.
The Company plans to arrange roadshows to directly provide information to investors. On March 21, 2014, CH. Karnchang and CK Power PLC will meet with investors in Singapore at the Thailand Corporate Day organized by SCB Securities Co., Ltd. On 27 March, it will participate in the Opportunity Day event, held by the Stock Exchange of Thailand. The Company is confident that it will receive good response from Thai and international investors.