PSH upbeat on revenue target despite H1 slump

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Pruksa Real Estate Plc, a property development subsidiary of SET-listed Pruksa Holding Plc (PSH), is confident it can hit its revenue target of 50.2 billion baht this year despite seeing income fall 14% in the first half.

Chief executive Piya Prayong said the company expects to rack up another 30 billion baht in the second half to help meet its revenue goal for 2017, up from 46.9 billion baht in 2016.

One of the key drivers will be reducing its sales backlog to 12.11 billion baht from 29 billion baht in the first half, he said.

"We have adjusted our business strategy from presales to prebuilt for single detached houses since the second quarter, which will be reflected in the second half," Mr Piya said.

"We've also shifted our unit prices to between 5 million and 10 million baht, up from 3 million to 5 million baht, to avoid bank mortgage lending rejections."

In the first half, Pruksa recorded 2.42 billion baht in net profit on revenue of 20.55 billion baht, down 21% and 14% respectively year-on-year.

The largest drop was in condominiums, which plummeted 33% to 5.65 billion baht.

Revenue from single detached houses and townhouses fell by 11% and 7% to 4.27 billion baht and 10.63 billion baht, respectively.

Presales in the first half totalled 26.15 billion baht, up 21% year-on-year. Pruksa aims to have 52.9 billion baht by year's end.

Pruksa plans to launch a total of 39 new projects worth a combined 36.2 billion baht later this year. Four sites worth a combined 6.5 billion baht will be in the upper-end segment.

To capitalise on the government's eastern economic corridor (EEC) development project, PSH launch three new residential projects in the eastern provinces this year worth a combined 2.3 billion baht. It launched two worth 1.2 billion baht in 2016.

"We will continue launching new residential projects in Chon Buri and Rayong as land prices remain affordable and most of our rivals are local developers," said Prasert Taedullayasatit, another of the company's chief executives. "We will also enter Chachoengsao."

PSH's research indicates Chon Buri's housing market was worth 10 billion baht in the second quarter, up 15% from the first quarter. Rayong's market was calculated at 2.4 billion baht, up 17% from the previous three months.

The Board of Investment expects public and private investment of at least 1.5 trillion baht in the EEC in its first five years.

Housing demand is tipped to rise as Thais relocate there and expatriates with families, multinationals and individual investors look to buy.

PSH shares closed yesterday on the Stock Exchange of Thailand at 23 baht, up 20 satang, in trade worth 70.8 million baht.

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