Modernform lowers revenue forecast, but profits soar

Despite the revenue adjustment, he said the company would report its highest profit in 35 year this year due to the sale of 60 million MFEC shares worth Bt633 million last month for a Bt300 profit.

Taksa said the company expected to almost double net profit to about Bt833 million this year compared to Bt420.09 million last year.

He said the prolonged political unrest, the sluggish economy, weak domestic consumption and the company’s failure to deliver some orders on time had forced it to revise down its revenue to Bt4 billion.

Modernform had paid dividends three times this year, including a special dividend payment from the MFEC shares sale, compared to the regular two times per year.

Busayapoka said that Modernform had Bt3.1 billion in backlog orders, 60 per cent of which would be recognised as revenue this year, with the rest to be recorded in 2015 and 2016. The company had no plans to add more factories for now and would focus on boosting manufacturing efficiency. Currently, it utilised 90 per cent of its production capacity.

The furniture market this year was estimated to be worth Bt60 billion, with Modernform having the largest share (30 per cent).

Taksa said that Modernform had formed an alliance with a Malaysian company to tap that country’s office furniture market and in a bid to curb the influx of foreign rivals in the Thai office furniture market.

Listing in Singapore

Modernform would list on the Singapore bourse on September 24, and would buy 5 per cent of the initial public offering shares with an investment not exceeding Bt60 million. In Japan, he said that Modernform had set up joint-venture company, ITOKI Modernform, with the Japanese partner holding a 51-per-cent stake.

The initial customer target was Japanese companies setting up offices in Thailand, as well as Myanmar, Laos, Cambodia and Vietnam in the near future.

He said that Modernform planned to tap Myanmar’s office furniture market next year after clearing legal issues.