IHL to profit on rising demand

The Siam City Research Institute (SCRI) reported IHL's management team as saying even though local vehicle sales volume had slowed because of rising oil prices, company sales growth had increased 51 per cent year on year, compared with market growth of 24 per cent.

The increase in sales growth is a result of automakers' strategy of using more leather seats in nonluxuryclass cars.

SCRI predicts IHL will post a secondquarter net profit of Bt47 million. Its firsthalf net profit is expected to be Bt99 million, compared with a loss of Bt40 million for all of last year.

IHL's new plant will be completed early next month, boosting its production capacity to 4.5 mil¬lion cubic feet per month. The expansion capaci¬ty will serve its new contract orders, ordered two years in advance.

The company has borrowed Bt40 million for the new plant's construction, which raises its debttoequity ratio to 1.6:1. However, SCRI believes the company can repay its debt in time, due to a huge cash flow from the new orders from carmakers.

Of the company's nine clients, four won taxprivilege approval from the Board of Investment for ecocars and B cars. Moreover, car dealers have shifted to leather seats in a bid to attract buyers.