Somboon Advance Technology expects a 5 per cent revenue drop this year as demand in its products is yet to fully recover.
SAT general manager for finance Nattakajorn Yanpirat said the effects of the first-car scheme were still being felt, with first-quarter demand not improving on the 2013 fourth quarter.
Nattakajorn conceded that this year would not be as good as 2013, as the first-car scheme impact would still be substantial in the first half of 2014.
He said 2013 revenue was expected to be similar to 2012 – at about Bt9 billion – after Bt9.5 billion was targeted.
The 2013 profit was expected to be better than the Bt815 million from 2012 as a result of improved production costs.
Nattakajorn said the recent weakening of the baht should not affect the company, as it had hedged against foreign exchange rate risk.
The company’s 2014 investment budget is Bt800–Bt900 million, with most continuing investments from last year.
The rest of the investment budget will be spent on new product lines, namely axles for large trucks and motor parts for tractors.
Nattakajorn said the company’s sales in tractor parts for Kubota was expected to increase total sales to Kubota by 20 per cent, following increased tractor production by the company.
As a result, he said sales to Kubota as a proportion of total revenue was expected to increase from 15 per cent to around 19 per cent.
Maybank Kim Eng Securities revealed that it expected SAT’s operating performance in the 2013 fourth quarter to be 15 per cent better than the third quarter – at Bt195 million.
For this year, Maybank Kim Eng anticipates SAT’s motor vehicle production will decrease 2 per cent from last year, with 2.4 million fewer vehicles made.
As a result, it predicted SAT’s sales would decrease 2 per cent and total revenue would be 8.75 billion.
However Maybank Kim Eng forecast the company’s gross margin this year would be 17.5 per cent, compared to 17.1 per cent last year, due to an increased profit at its iron foundry ICP2.
That would result in SAT’s 2014 net profit increasing 6 per cent to Bt798 million.