NawaraT Patanakarn (NWR), a construction and engineering firm, is preparing to bid for various state projects that will be coming on stream four months from now worth more than Bt7.2 billion.
NWR expects to secure 25 per cent of the total value of the projects it will be bidding for.
It still has more than Bt14 billion worth of backlog projects, 35 per cent of which will be recognised as revenue this year, with the rest to be gradually recognised until 2016. It expects 5-per-cent revenue growth this year.
NWR hopes real estate will account for 10 per cent of its overall business within three years, which should boost its profit margin.
The company is ready to proceed with overseas expansion to broaden the revenue base, according to its senior vice president for new business and strategic planning, Pasan Swasdiburi.
NWR has the financial capacity to take on more than Bt10 billion worth of projects without raising capital. The company can issue debentures if it has to take on a large-scale project to minimise adverse impacts on its shareholders and ensure effective cost control, Pasan said.
The company is preparing to issue Bt1.5 billion worth of three-year debentures, rated “BBB-” by TRIS, on August 25-27 offering 5.50 per cent per annum to reduce its loan-interest burden. NWR has Bt200 million in loans charging 7.45-per-cent interest.
Some of the proceeds from the debenture issue will be used to settle outstanding loans fully. Of the remainder, Bt700 million will be used to invest in real estate, Bt165 million for investment in prefab factories, and Bt200 million for investment in Myanmar. The rest will fund NWR’s working-capital needs, Pasan said.
This year, NWR expects 5-per-cent overall revenue growth from last year’s Bt6.95 billion, and net profit to exceed last year’s Bt58.36 million, especially after the improved political and economic climate. It expects net profit margin to rise to 2 per cent from last year’s 0.84 per cent.
Gross profit is expected to be no less than 7 per cent compared with 5.31 per cent, as NWR has secured new projects with higher profit margins (for example, a tunnel-construction and coal-drilling project at Mae Moh), coupled with revenue realisation from high-profit-margin real-estate projects, Pasan said.
NWR expects real-estate business to contribute more to its overall revenue, accounting for a 10-per-cent share in 2016-17 compared with the current 3 per cent, as real estate typically offers a high gross profit margin of 20-30 per cent. Currently, NWR has two real-estate projects worth a total of Bt1.5 billion. It will launch a new Bt150-million low-rise project next year and is looking to acquire more prime real-estate sites, Pasan said.
As for next year, NWR sees business opportunities in construction work for both the public and private sectors as well as business opportunities outside Thailand. It plans to bid for a water-gate project in Vietnam and a water-pipe project in Sri Lanka worth a total of Bt1 billion in mid-2015.
Other possible projects under feasibility study for 2015 include a Bt200-million investment in an office building for lease, as well as a hydroelectric-generation plant in Laos, Pasan said.