Pruksa drops overseas plans, to focus on upcountry market
August 14, 2014 01:00 By SOMLUCK SRIMALEE THE NATION
PRUKSA REAL ESTATE has suspended plans to expand overseas, focusing on the domestic market over the next two years, after the National Council for Peace and Order approved a policy to invest Bt2.4 trillion to develop the country's infrastructure between 2
The company also plans to issue three- and five-year debentures worth Bt4 billion this quarter. Early this year, shareholders approved a debenture issue worth Bt7 billion to keep its financing costs down, said Lersuk Chuladesa, chief operating officer and acting managing director.
Thongma Vijitpongpun, chairman of the executive committee and chief executive officer, said the company’s operations in India would proceed but a plan to invest in Vietnam and Indonesia would be suspended. Pruksa will also pull out of an investment in Maldives after facing problems with foreign-exchange transfers and other matters. After the suspensions, Pruksa’s managing director for overseas investment, Maytha Chancham-charat, resigned effective October 1. The company also consolidated its overseas business unit into another unit.
Meanwhile, the company will expand its domestic investments, especially upcountry. It targets increasing the provincial contribution to total revenue from 5 per cent to 7 per cent this year and to 10 per cent in 2015.
“We see strong demand for homes in the provinces, which now account for about 40 per cent of total market value, averaging Bt600 billion a year. This market has more potential to increase than business overseas,” Thongma said. He added that when the government starts investing in infrastructure upcountry, that would boost residential demand more strongly than in metropolitan Bangkok.
Pruksa recorded revenue of Bt18.8 billion in the first half, up 22.7 per cent year on year, and net profit of Bt2.93 billion, up 34.5 per cent. The company also recorded presales of Bt17.93 billion, down 20.9 per cent, as demand in the first half dropped. However, the company has maintained its full-year targets of Bt43 billion presales and revenue of Bt42 billion.
The company plans to launch 35 new residential projects worth Bt41.4 billion in this half of the year.