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Sansiri cuts its revenue target for this year

SANSIRI HAS lowered this year's presale target from Bt48 billion to Bt45 billion and the revenue target from Bt35 billion to Bt30 billion because of the slower economy and the political turmoil in the final quarter.

Chief operating officer Wanchak Buranasiri said the company had recorded presales of Bt42 billion in the first 11 months of the year. It noted that the demand for new homes had dropped both in Bangkok and upcountry as the economy slowed.

"We saw the signs of purchasing power for homes dropping since the third quarter, while the political problems in the last quarter of the year also had a negative impact on people's confidence to buy a home. The average number of potential customers visiting our residential projects dropped by about 5 per cent. As a result, we decided to lower our presale and revenue targets to match the demand in the market," he said.

For the first nine months, the company reported revenue of Bt20.06 billion and net profit of Bt872.78 million, for a profit margin of only 4.3 per cent of revenue. However, Wanchak said the net profit margin would be about 8 per cent as a number of condominium projects are ready for transfer to the customers.

Sansiri's business strategy for the new year also calls for fewer launches of residential projects than this year's 49.

"We may launch fewer than 40 projects next year, but we are still studying this," he said.

However, the company has a backlog of homes already sold and awaiting transfer worth Bt62.16 billion. They will be transferred over the next three years. Up to 70 per cent of the backlog is condominiums.

This will be enough to support business growth next year despite fewer new launches, Wanchak said.

The company still targets presales of at least Bt45 billion and revenue not lower than Bt30 billion for 2014.

The company yesterday opened its second prefabrication plant, worth Bt160 million. The plant is on 17 rai (2.7 hectares) near the first one in Lam Luk Ka, Pathum Thani province.

The plant will make walls for the firm's dCondo brand, enough for 10 buildings a month, and some for detached houses and townhouses to support the first plant. The combined production capacity of the two prefab plants can supply an average of 150 detached houses a month.

This will speed up the construction process to ensure on-time delivery to customers.

"Our new plant will secure our construction process at a time of labour shortage and when our subcontractors face a shortage of construction materials," Wanchak said.




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