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Listed developers post only slight growth in Q1

Political crisis, slowing economy dent consumer confidence, but leading firms expect market recovery in 2nd half

Listed property firms have posted only slight year-on-year growth in their overall revenue and net profit for the first quarter, due to home-buyers deferring their decision to have units transferred to them amid the prevailing political uncertainty and economic slowdown.

Developers believe the residential market will, however, recover in the second half of the year.

A notable exception to the first-quarter trend is Pruksa Real Estate, whose president and CEO Thongma Vijitpongpun said the company's financial results showed revenue of Bt8 billion, up 26.9 per cent from the same period last year, while net profit came in at Bt1 billion - some 42 per cent higher.

"If there had been no political problem, our financial results in the first quarter may have been even better," he said.

Thongma accepted that the political turmoil had hit customer confidence in the final quarter of 2013 and the first two months of this year.

However, the company has tried to manage its business by transferring completed units to its customers in accordance with its business plan, even though its presales may have come in lower than originally estimated.

This approach boosted its performance during a period of market recovery on March and April, he said.

"We believe the market will recover [further] in the current quarter and the second half of the year," he added.

That said, he accepted that the overall residential market in Bangkok and the provinces would drop by between 5 per cent and 10 per cent this year.

Meanwhile, Noble Development announced revenue of Bt704.66 million for the first quarter, down 45.31 per cent from the same period last year.

Director Sitti Leelakasamelerk told the Stock Exchange of Thailand that the company's financial results were attributed to the fact that most of its condominium projects were under construction, while many of its customers had also postponed the transfer of completed units.

Sansiri also accepts that its financial results this year could be lower than originally projected, due to residential demand having fallen in the first quarter, said chief operating officer Wanchak Buranasiri.

At present, around 10 per cent of the developer's customers are declining to follow through with their condominium bookings, out of concern over political uncertainty and a slowing economy.

"We may be revising down both our full-year revenue and presales targets if the market in the current quarter still slows down," he said.

Sansiri's targets at the start of the year were for revenue of Bt34 billion and presales of Bt30 billion by year-end.

LPN Development managing director Opas Sripayak said the fact that some customers had postponed their decisions to have condominium units transferred to them had impacted directly on the company's revenue, which grew by just 4.16 per cent from Bt2.4 billion in the first quarter of last year to Bt2.5 billion in the same period this year.

First-quarter net profit, meanwhile, was lower than a year ago.

Condominium projects will be completed and delivered to customers on time, he said, adding that the company would therefore maintain its presales and total revenue targets of Bt26.4 billion and Bt15.2 billion, respectively, for the full year.

Sammakorn managing director Kittipol Pramote Na Ayudhya said the company's net profit in the first quarter had dropped by 69 per cent compared with the same period a year ago, due mainly to a slight rise in sales coupled with increasing land costs.

Earlier, TRIS Rating forecast that the property sector this year would contract from the 2013 level, thanks to a decline in consumer confidence, plus commercial banks restricting the provision of both project funding and mortgages to developers and home-buyers, respectively.

These factors would directly affect the financial results of both listed and non-listed property firms, the company said.


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