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Published on November 30, 2007

The move comes following additional earnings from a recently acquired casting plant and more orders in this quarter.

The company recorded sales revenue of Bt4.2 billion last year.

Director Verayut Kitaphanich said the company would book another Bt14 million to Bt15 million in income this year from the casting plant, which it acquired two months ago.

To cushion the slowdown in the auto industry, the company will broaden its business next year to include air-conditioning parts and electrical appliances and boost its ratio of income

from exports, in order to diversify its revenue structure, he said.

The auto industry, which contributes 90 per cent

of SAT's revenue, is ex-

pected to grow 8 per cent this year.

"We're confident our business growth next year will exceed the industry average, because the company has received more orders and has successfully increased its number of customers. The company is also mulling increasing production capacity for coil springs and axle shafts, because it is currently running at more than 90-per-cent capacity," he said.

Mitsubishi is SAT's major customer, contributing 34 per cent of total revenue. Toyota is second at 24 per cent. Auto Alliance Thailand contributes 11 per cent, Isuzu 7 per cent and Honda 6 per cent.

The rising cost of raw materials and appreciation of the baht have not had a significant impact on the company, because revenue from exports accounts for only 3-4 per cent of total sales, and hikes in steel prices raised its costs only 0.2-0.3 per cent, he said.

Verayut said existing orders worth Bt1.27 billion would be realised next year and another Bt1.54 billion in 2009.

The company's gross margin in this year's third quarter stood at 22.46 per cent, compared with an industry average of 15 per cent. Its quarterly sales revenue jumped 20 per cent year on year to Bt1.33 billion.

This year's gross margin will average 21 per cent, because the company's acquisition of International Casting Product's casting plant helped slim down its production costs 1 per cent, he said.

Kim Eng Securities (Thailand) has maintained a "buy" recommendation on SAT shares, given its solid third-quarter earnings.

Siriporn Chanjindamanee

 The Nation