Industrial land plotsales slowing down
BUSRIN TREERAPONGPICHIT
Amata Corporation Plc, the country's largest industrial estate developer, has cut its revenue target by 700 million baht or 12.7%, to 4.8 billion baht from an earlier target of 5.5 billion, due to continuing political uncertainty and the sluggish economy, according to the company's treasurer, Varaporn Vatcharanukroh.
Amata had earlier set a revenue target of 5.5 billion baht this year based on expected sales of 2,000 rai of industrial land plots. However, it sold only 250 rai in the first six months of this year.
As a result, the company has set a new land sales target at 1,500 rai worth 4.8 billion baht.
So far in the third quarter, the company has sold around 150 rai of land.
"We decided to cut our revenue target after we saw the sale result of the second quarter," said Ms Varaporn. "Political woes have adversely affected investor sentiment, and have definitely affected our business."
She conceded that even the revised target remained tough to achieve.
However, the company is working hard to negotiate with four large customers to purchase large land plots.
The clients are looking at acquiring around 200 to 300 rai each but they have been reluctant to make commitments because of uncertainty about when a new government will be formed and what its policies will be. The company's new land sale target would be achieved if it was successful in securing the deals.
Apart from industrial land sales, Amata has shifted its focus to ready-built factories for rent.
The rental factory projects are also designed to serve specific groups of investors under the company's partnership joint ventures such as the Ota project, a joint venture with Japanese investors developing an industrial zone to serve investors from Ota province, and the Holley industrial project, a joint venture with the Holley Industry Group of China.
The company is also conducting a feasibility study to construct residential accommodation to serve executives and workers in and around its two industrial estates, Amata Nakorn in Chon Buri and Amata City in Rayong.
"This is one of our key strategies to drive sales," Ms Varaporn said.
Amata reported sales in the second quarter of 618.5 million baht, a decrease of 58.9% from the same period of last year, while net profit for the quarter declined by 62.6% to 150.9 million baht.
For the first half of this year, the company recorded revenue of 1.58 billion baht, a 37% decline from the same period last year, and net profit of 431.1 million baht, a decline of 69% year-on-year.
Ms Varaporn said many clients had delayed decisions to buy industrial land in this quarter because they wanted to wait until clearer political situation.
She said, however, that the company expected Amata City Bien Hoa, its joint-venture industrial estate in Vietnam, would perform above the targets set.
Amata expects its land sales from the Vietnam project this year to reach 50 hectares at minimum. It sold 36 hectares in the first half of the year.
The company holds a total land bank of 10,000 rai approximately. Of the total, 3,000 rai have been sold.
Amata shares closed yesterday on the Stock Exchange of Thailand at 14.60 baht, unchanged, in trade worth 14.2 million baht.
Source- Bangkok Post Wednesday September 06, 2006