Brokers cut forecasts of firms in hard-hit Rojana

Asia Plus Securities said in its research that of the company’s two industrial estates in Ayutthaya and Rayong provinces, the former was the key revenue earner, with the main customers being the automotive and electronics industries.
Land sales at Rojana Industrial Park in Ayutthaya account for 15 per cent of company revenue, while 60 per cent is contributed by infrastructure services.
Asia Plus said the severe flooding had had a major effort on the industrial estate, causing some plants in the first phase of the park to cease operations temporarily. The company is expected to require some time to return the damaged areas to normal, which could take until the end of the year.
Rojana will, therefore, witness lower revenue during the current quarter. The brokerage has revised downwards forecast land sales throughout the year to 350 rai (56 hectares) from 600 rai, with the revenue from sales this year now predicted to drop to Bt1.2 billion from the previously expected Bt1.8 billion.
Based on the projected lower revenue from infrastructure services, at Bt4.8 billion from the Bt5.4 billion previously estimated, Asia Plus has revised the 2011 net-profit forecast for Rojana Industrial Park to Bt674 million, a 41-per-cent drop from last year.
Moreover, the second and third phases of the Ayutthaya estate are expected to be hit by the flooding soon. Asia Plus said these phases housed larger plants than the first phase, besides which they contained the Rojana power plant, which is a high-value investment.
DBS Vickers (Thailand)’s research said that because 198 factories in the first phase of Rojana Industrial Park in Ayutthaya could not yet resume operations, the flooding would affect the company’s operations in the current quarter.
Rojana Industrial Park reported to the Stock Exchange of Thailand yesterday that the flood crisis in Ayutthaya was becoming more serious.
It said the company had put the utmost effort into coping with the situation by strengthening and increasing the height of the protective dykes around the project’s area. However, the water flow and volume entering the surrounding areas has been increasingly strong and overwhelming.
It added that the situation had reached crisis point, with the 3-metre-high dykes having been breached.
Jirapongs Vinichbutr, managing director of Rojana Industrial Park, said in the filing that the company had undertaken repair of the dykes, but it had proved impossible to keep the situation under control.
Risks continue to exist if more water from other dams is released into the area, together with the continuing strong rain expected for the next few weeks and the high sea level predicted for the middle of the month.
The company cannot estimate all the losses at this stage, Jirapongs said, adding that the identified losses to date all related to services income from infrastructure facilities.
As regards other industrial estates, DBS Vickers said companies’ facilities in Hi-Tech Industrial Estate Park in Ayutthaya had not yet been flooded, but they remained at risk.
The brokerage expects that even though its plant is not in Ayutthaya province, Thai Stanley, a manufacturer of auto bulbs and lighting equipment, will not be able to supply bulbs to Honda because production at the auto-maker’s plant in Rojana has temporarily ceased because of the flooding.
The brokerage also said that with flood water heading to Pathum Thani province, where Navanakorn Industrial Estate and Bangkadi Industrial Park are located, companies in those two estates were at risk.
Packaging and retail are two sectors that are gaining from the situation, it added.
Capital Nomura Securities said in research that 341 factories in the Rojana and Hi-Tech parks in Ayutthaya had ceased operations because of the floods, affecting 140,000 workers. Most are in the electronic-parts and auto industries.
Single Point Part (Thailand), whose plant is in Rojana Industrial Park in the province, reported to the stock exchange that it had decided to cease production temporarily and evacuate staff and workers from the industrial complex.
The company has put up dykes around the premises to alleviate further possible damage.
Managing director Chakrit Methigunchanan said Single Point had set up a relief centre for employees and their families in rented premises at the Vic Thai factory in Wang Noi district.
He said the company could not evaluate the damage to facilities until the situation fully unfolds and can be resolved. The plant at Indra Industrial Park in Sing Buri province, which produces hard-disk parts and accounts for 50 per cent of the company’s income, is still in operation, he added.