Ch Karnchang targets 20-25 per cent of govt infrastructure contracts
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CONSTRUCTION firm Ch Karnchang (CK) aims to win 20-25 per cent of the contracts for the government's infrastructure projects this year, for total value of Bt150 billion.
If it achieves this goal, the company’s total revenue this year will be nearly the same as the Bt35.4 billion it reported in 2014, which saw net profit of Bt2.29 billion, as gross profit margin should be between 9 and 10 per cent, chief executive officer Plew Trivisvavet said after a shareholders’ meeting yesterday.
Up to Bt32 billion of this year’s revenue will come from the company’s backlog of projects under construction, worth Bt100 billion, and about Bt3 billion from its subsidiaries including CK Power, Bangkok Expressway (BECL), Bangkok Metro (BMCL), and TTW.
Meanwhile, the company’s shareholders yesterday approved an annual dividend of Bt0.55 per share for 2014 performance.
Plew said government spending on infrastructure projects started to enter the market early this year. As a result, CK should be able to report that first-quarter revenue met its target of Bt7 billion to Bt8 billion. The company will officially report its quarterly results in mid-May.
“We believe that the government will start more infrastructure projects in the second half of the year. This will help the recovery of the construction business. We plan to bid on all of the government’s new infrastructure projects, such as motorways, railway double-tracking and high-speed rail, targeting a share of between 20 and 25 per cent of the total value of projects put out to tender this year.”
The company is also ready to invest in infrastructure projects through public-private partnerships via its subsidiaries BECL, BMCL, TTW and CK Power.
The investment budget will come from the company’s internal cash flow and debenture issues. CK issued debentures worth Bt4 billion early this year with an interest rate of 4.16 per cent, lower than the 4.8 per cent paid by its previous debenture issue, thanks to its credit rating improving from “BBB+” to “A-”, he said.
Also this year, the concession for operation of the MRT Blue Line extension will be finalised and Ch Karnchang and BMCL will employ their best efforts to expedite its operation, Plew said.
For its overseas investments this year, the company will focus on two countries, Laos and Myanmar, where infrastructure development is seeing a high growth rate, he said.
