MK Real Estate targets flat revenue despite slump in January demand

Real Estate February 12, 2014 00:00

By Somluck Srimalee
The Nation

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MK Real Estate Development is leaving its revenue target at Bt2.8 billion this year, nearly the same as last year, even though residential demand dived 20 per cent month on month in January after the political turmoil.

About Bt800 million will come from its backlog and the rest from its Bt5.1-billion inventory for sale at its 15 existing projects, president Chuan Tangmatitham told a press conference yesterday.
The remaining Bt100 million of its Bt900-million backlog of homes waiting to be transferred to customers will be booked as revenue next year.
The company will go ahead with its plan to launch four low-rise residential projects with detached homes or townhouses worth a combined Bt3.2 billion this year – one of them this quarter and the rest in the second half. 
The company delayed its condominium project on Suksawat Road in Bangkok worth between Bt1.7 billion and Bt1.8 billion when it saw the uncertainty in the country’s political situation.
“We have to wait and see whether the political problem will be prolonged before making the decision to launch a condominium project at this time,” Chuan said.
Banks have restricted mortgages, so the rejection rate for the company’s customers rose to 11 per cent last year from 9 per cent in 2011. 
Director Chutima Tangmatitham said: “Most of our customers who face bank rejections have financial statements that are lower than the banks’ standard, or some of them have personal debt that is higher than purchasing power.” 
The company has set aside a capital-expenditure budget of Bt800 million to Bt1 billion to buy vacant land for developing residential projects next year. 
It will issue debentures or maybe bills of exchange (B/E) worth Bt400 million to Bt500 million this year to support expansion into 2015. 
Its debt-to-equity ratio is about 0.3 time, so it has enough room to take on project loans and also issue bonds or B/Es, she said.
MK Real Estate Development reported net profit of Bt312.24 million on revenue of Bt20.4 billion in the first nine months of last year.