Mixed picture as top developers adjust revenue targets

Given the unpredictability of the property market this year, most listed residential developers have had to adjust their revenue and presale targets from the estimates they made earlier in the year.

Some have revised their revenue targets upward, thanks to having transferred units above the previously targeted level, especially for condominiums priced up to Bt10 million.

Others have had to do the opposite after failing to transfer residential projects in accordance with their plans, while there are also some that are sticking to their original revenue goals.

“We have increased our total revenue target from the Bt41 billion estimated early this year to Bt42 billion, after witnessing strong demand for projects with homes costing up to Bt10 million per unit in the second half – after the National Council for Peace and Order assumed the running of the country,” said Pruksa Real Estate president and CEO Thongma Vijitpongpun.

The property market dropped more than 20 per cent in the first half, during a period of heightened political uncertainty, he said. 

However, it then began to recover following the coup, which boosted the market to second-half growth of over 15 per cent, which in turn enabled Pruksa’s presales and revenue to expand above the originally estimated levels, he added.

In the first nine months of the year, Pruksa recorded revenue of Bt30.54 billion and a net profit of Bt4.77 billion, up 20.9 per cent and 15.6 per cent respectively from the same period last year.

Land & Houses has also upped its full-year revenue projection, from Bt24 billion to Bt25 billion, thanks to a second-half recovery in demand and its condominium projects being transferred to customers in line with the developer’s target, said managing director Adisorn Nanthanarapoon.

The previous revenue estimate was based on the political uncertainty in which the country found itself early this year, which was seriously dragging down demand, he added.

AP (Thailand) is another leading developer that has revised its revenue target for the year in the upward direction, from Bt22 billion early this year to Bt22.5 billion-Bt23 billion now, due to the company having transferred condominium projects to customers on time, as well as experiencing a lower-than-expected rejection rate, said Pumipat Sinacharoen, the company’s chief people experience officer.

AP has also upped its full-year presales target, from Bt21 billion to Bt22 billion, thanks to residential demand returning to the market, especially for condos and townhouses costing up to Bt10 million.

Quality Houses also expects its revenue to come in above the earlier estimate of Bt19.4 billion, having posted income of Bt17.04 billion for the first nine months of the year.

“We cannot say how much our revenue will be this year, but we will achieve Bt20 billion after being able to transfer more residences to customers in the current quarter,” said the company’s president and CEO, Rutt Phanijphand.

 

Transfer delays bite

On the other side of the coin, Sansiri has revised its 2014 revenue target downward from Bt34 billion to Bt29 billion, after customers delayed having their homes transferred on schedule, with some having to cancel their purchases.

“The combination of political uncertainty and slight economic growth affected our presales and transfers to customers to the extent that we have had to lower our total revenue target for this year,” said chief operating officer Wanchak Buranasiri.

Sansiri announced revenue of Bt19 billion and net earnings of Bt2.16 billion for the first nine months of the year.

Property Perfect is another developer that has lowered its revenue target, from Bt22 billion to Bt16 billion, due to its performance during the first nine months coming in below estimate.

Property Perfect posted revenue of Bt9.95 billion and a net profit of Bt389.78 million for the period.

Meanwhile, some leading residential developers continue to maintain their revenue targets for the year.

For example, SC Asset Corp is sticking to a Bt12-billion target for the full year, after posting revenue of Bt8.22 billion for the first nine months, while Supalai is keeping to its Bt20-billion estimate following the generation of Bt11.77 billion from January to September.