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Published on August 21, 2007

Central Pattana's net profit of Bt435 million for the second quarter was in line with the broker's earnings forecasts for 2007-10. It has maintained the forecasts, assuming that the sale of malls to the CPNRF property fund resumes in the years 2008-10. However, from 2011 onwards the broker has revised its earnings expectations upwards by 15 per cent, in the light of new projects and changed assumptions for occupancy and rental rates.

The higher estimates are based on occupancy rates averaging 90 per cent because of the favourable location of new projects on Chaeng Wattana, Rama IX and Ploenchit roads and in Pattaya, Chon Buri town and Khon Kaen, as well as higher rental rates.

In the second quarter, Central Pattana's sales and service income rose 20.8 per cent year on year and 4.9 per cent quarter on quarter to Bt1.93 billion. This reflects higher contributions from CentralWorld, CentralWorld Tower, Central Ram-Indra (after renovations) and Central Chiang Mai. However, the gross margin fell to 41.4 per cent from 44.1 per cent year on year, due to higher costs and depreciation at CentralWorld and Central Ram-Indra.

The ratio of selling and administration expenses to sales also rose to 15.6 per cent from 12.7 per cent year on year, because of CentralWorld and higher personnel expenses.