Bangkok--4 Mar--BrandComm Consultants
Hemaraj Land And Development Public Company Limited announced its operating and financial results for the Year 2008 as summarized below.
Year 2008 Net Income
For 2008, Hemaraj reported Total Net Income of Baht 1,342.0 million, an increase of 15% compared with the same period of last year. Net Operating Earnings was Baht 1,330.0 million, an increase of 19%, compared with the same period of last year. This was partially due to 2008 included dividends and profits from associated companies of Baht 73.6 million, the reversal of specific tax and transfer fee accruals of Baht 248.2 million from previous quarters due to lower transfer costs, and a lower income tax compared to the prior year.
Earning per share of Baht 0.143 Baht per share, represented an increase of 13 % from the same period of last year.
David Nardone, President and CEO of Hemaraj Land And Development Public Company Limited had the following comments on the company’s performance.
“Hemaraj finished 2008 with Total Net income of Baht 1,342 million, an increase of Baht 178 million or 15%. Total Revenue was Baht 4,982 million compared with Baht 5,238 million for the same period of 2008, representing a 4% decrease. With anticipated lower residential revenue in 2008 (3% of operating revenue) compared to 2007 (43% of operating revenue), our growth from a broad revenue base of industrial estates, utilities, and property replaced much of this.
We also led the market in industrial estates sales (or rental) with 1,623 rai (649 acres) recorded in the Year 2008, the highest sale in the company history. Suzuki Motors, and other leading companies selected Hemaraj industrial estates with 60 contracts (another record), 27 new customers and 33 project expansions from existing customers in 2008. So by all accounts 2008 was a record year of achievement.
Having said that, the end of 2008 and in 2009 to date have seen unprecedented turmoil in the financial markets globally, a dramatic drop in consumption, and subsequently drops in production levels for manufacturers with disruptions in key areas of our customer base, namely automotive and petrochemical. Compared to our 1998 experience, on the positive side we are much stronger financially with a broader revenue base. The negative part is the impact of export markets, which have now firmly been established for automotive and other sectors. We have prepared our business and financial plans, as best we can, for the short-term disruption in the market due to severe global conditions.
We believe the long-term fundaments for Thailand and our business model will remain attractive. As companies reset demand expectations over the coming years, they will shift production to strategic locations based on cost currency and market access, these being factors favoring Thailand. Infrastructure investment and industrial cluster opportunities will continue to drive automotive, petrochemical, and other industrial sector investment in Thailand long term, particularly at Hemaraj’s “Detroit of the East” automotive cluster in the Eastern Seaboard.
Hemaraj is positioned in these uncertain times still to increased broadened revenue opportunities as markets globally start to settle and to recover over the next years. Hemaraj will continue significant investments in utilities including power with our Gheco-One IPP power project and other recurring utility income. We have a strong balance sheet for acquisition and expansion opportunities. However, we also need to be cautious to manage the risk profile of the company in this period particularly and in order to optimize predictable returns to shareholders.”
Revenue and Results of Operations for the Year 2008
For the Year 2008, Hemaraj’s Total Revenue was Baht 4,982.5 million compared with Baht 5,238.1 million for the same period of 2007, representing a 5% decrease. Total Operating Revenue from core businesses was Baht 4,581.4 million, a 12% decrease from the same period of 2007. Industrial Estate Land Sales for the Year 2008 including Profit from Associated Industrial Estate were a record Baht 2,853.9 million, or a 32% increase. There is an additional Baht 1,209 million in deferred revenue from Industrial Estate Land Sales not recognized to date, based on the percent completion method from 3 industrial estate new phase developments and representing sales that will be recognized primarily over the next 3 to 18 months.
Total Utilities Revenue including industrial estate utilities, profit dividend from power utilities associates, and other utilities and services fees increased to Baht 924.0 million, an increase of 28%. Total Rent Revenue including SME factory rental, pipe-rack rental, and commercial office rental increased to Baht 421.7 million, an increase of 28%. Sale of Property including SME factory sales, residential sales and other land/property sales decreased to Baht 381.8 million from Baht 1,944.0 million, an 80% decrease due to residential prior year percent completion.
The Gross Profit was Baht 1,986.9 million, an 11% decrease from the same period of last year. Earning Before Interest Tax Depreciation and Amortization (EBITDA) were Baht 1,442.7 million, a decrease of 17%. The Gross Profit Margin and EBITDA Margin were 43% and 31%, respectively.
Significant Activities for the Year 2008
- Industrial Estate Sales were #1 Market Share 2008 (3 years running) with 1,623 rai (649-acres), with 60 contracts, 27 new customers and 33 existing customer expansions.
- 412 rai (165 acres), at H-ESIE phase II sold to Suzuki Motors.
- 22 New SME Factories contracts with 16 factories rented, 13 factories cancelled, 2 factories new sales and 4 factories converted from rental to purchase.
- GHECO-One 660MW IPP Power Project, 35% shareholding with Glow Energy (GDF Suez Group), now under construction after signing EPC, PPA, and Financing contracts.
- Cash from Operations generated was over Baht 8 billion, which funded a large capital plan (including GHECO-One Baht 2.2 billion to date), while increasing cash paying dividends and further reducing debt.
- Hemaraj paid Baht 0.035 per share interim dividend for the 1st half 2008 operating results.
Significant Activities after the Year 2008
- The Board recommended a year-end dividend of Baht 0.035 per share or for 2008 Baht 0.07 in total per share, to be considered at the Shareholders Meeting.
Balance Sheet Highlights at 31st December 2008
At 31st December 2008 Hemaraj reported Total Assets of Baht 13,712 million, Total Liabilities of Baht 5, 574 million and Total Shareholders Equity of Baht 8,138 million. The Net Debt to Equity ratio was 0.57 to 1 with Cash on Hand being Baht 932 million.
For further information, please visit our website at www.hemaraj.com or contact by email at [email protected]
Mr. Paopitaya Smutrakalin, Director — Investor Relations
Hemaraj Land And Development Plc.
18/F UM Tower, 9 Ramkhamhaeng, Suanluang, Bangkok 10250, Thailand
Tel: 662-719-9555 to 9 Fax: 662-719-9546 to 7
For more information, please contact:
BrandComm Consultants Co., Ltd.
Ms. Pailin Buranamittranond /
Ms. Sasinee Aoucharoenpuck
Tel. 02 642 9620 (12 lines) Fax. 02 642 9622