Preuksa lifts pre-fab output

Property firm Preuksa Real Estate plans to spend Bt800 million to double its prefabricated building material output this and next year, president and CEO Thongma Vijitpongpun said yesterday.

About Bt100 million will be spent this year to expand its outdoor plant production, he said,

Another Bt700 million will be used next year to boost its capacity from 110,000 square metres a month (the amount used in 240 detached houses) to 220,000 square metres.

The money for the expansion will come from its cash flow, Thongma said.

Preuksa also plans to issue debentures worth between Bt1.5 billion and Bt2 billion in the second half of this year.

The capital raised will be used to buy land and build homes. It will set aside Bt3 billion to purchase land this year as well as next year.

The debentures will offer an interest rate of between 4 and 4.5 per cent.

"We have to issue the debentures to support our expansion," Thongma said.

With the debentures, Preuksa's debt to equity ratio will rise from 0.37:1 to 0.5:1. That will still be lower than rival firms, he said.

Preuksa had to raise home prices 2-3 per cent this year, he said, to cover rising construction and raw materials costs, which had risen 5-10 per cent.

The firm attempted to save on construction costs by cutting the time to build homes from 110 days to 60 days for detached houses. This will help it to maintain a gross margin of 37 per cent and a net profit of 15 per cent.

Preuksa posted first-quarter revenues of Bt2.23 billion and a net profit of Bt308 million, up 18 per cent and 6 per cent respectively from the same period last year.

Its gross margin, made before calculating management costs, was 37.4 per cent, up 34.9 per cent from the same period last year.

It recorded presales for homes worth Bt4.8 billion, up 104 per cent from the same period last year.

Of this amount, Bt2.2 billion came from its townhouse projects Preuksa View and the Connect. About Bt1.6 billion was derived from its detached-house projects at The Plant and Preuksa Village. About Bt1.04 came from its Seed and City View condominiums.

It now plans to launch 21 residential projects worth Bt10.5 billion in the second and third quarters of this year.

It launched 12 projects in the first quarter. These 33 sites are part of a business plan to launch 40 projects worth Bt20 billion this year.

Preuksa expects to achieve sales of Bt20 billion during the presales period. They should contribute Bt14 billion in revenue for this year, up 55 per cent from its Bt9.09 billion last year.

Yesterday, four of the five brokerage firms that present their reports on the Settrade website recommended a "buy" rating for Preuksa with a target price of between Bt13.10 and Bt14.20.

Preuksa shares closed at Bt11.60 yesterday, up Bt0.10.