MBK, operator of the MBK Centre, expects its net profit to jump in the next few years, buoyed by its real-estate business.
Suvait Theeravachirakul, chief executive officer of MBK, said the company had targeted revenue for this fiscal year (July 2010 to June 2011) to grow by 10 per cent to Bt6.6 billion from the same period last year. Net profit is expected to grow by 30 per cent to between Bt1.3 billion an Bt1.4 billion this fiscal year.
"The reason for rising earnings is sales from Paradise Park shopping centre, which will contribute to the company," he said, adding that traffic at the centre was 80,000-90,000 people per day, or Bt1 billion in sales.
MBK holds 50 per cent of Paradise Park, meaning that the company can realise profit responding to its proportion of shareholding. Therefore, the company expects its gross margin this fiscal will be 40 per cent, up from 33 per cent in the previous year.
Last fiscal year, MBK posted Bt2.5 billion in net profit on revenue of Bt8.5 billion. Of the net profit, Bt1.5 billion was extra income from selling shares of Siam City Bank to Thanachart Bank.
The company expects its hotel business to be stable this year although the number of tourists has yet to pick up. It expects that foreign tourists will return to Thailand next year.
The company set aside an investment budget of Bt1.5 billion this year (2010-11), of which Bt1.2 billion will be spent on another new shopping centre, which is in the construction process, expected to be finished in the middle of next year.
It will also spend Bt97 million on creating a new hotel, Bt29 million on a golf-course development, and Bt175 million on a real-estate project.
MBK has a land bank of 6 rai (about a hectare) on Ratchadaphisek Road, which it is considering developing as either a condominium project or an office building for rent. The project is expected to cost Bt500 million and the development is expected to begin next year. The company expects to realise revenue from the project between next year and 2012.
It also has a land bank in Phuket of between 300 and 400 rai and another 200 rai in Pathum Thani province. It declined to specify what project it will develop on these land banks, pending a complete feasibility study.