AP plans 20 new residential projects

BackJan 27, 2010

Strong Q4 cash spurs higher investment

KANANA KATHARANGSIPORN

The listed developer Asian Property Development Plc (AP) plans to launch 20 residential projects worth a total of 30 billion baht in 2010, an increase on last year, prompted by an improved financial status.

AP would take advantage of its good cashflow to launch 15 low-rise projects and five condominiums in 2010, said Pumipat Sinacharoen, deputy chief finance officer.

"We've received a large amount of cash in the fourth quarter last year and the first quarter this year, mainly from unit transfers at seven condominium projects with about 3,000 units worth more than 10 billion baht," he said.

AP's debt-to-equity ratio is currently about 0.8 to 0.9 times. The company aims to cap the ratio at one time to maintain financial discipline. It also has 1.5 billion baht of cash on hand, said Mr Pumipat.

"When we have a stronger financial situation, we will make a bigger investment. If not, we won't. We won't overleverage. If there's any unpredictable bad situation, we will slow down new launches and land acquisitions," he said.

AP is ready to adjust its strategy if required, as it did last year by postponing launches from the first half of 2009 to the fourth quarter, in light of a global slowdown, political instability and an unfavourable property market, he said.

Another stimulus for launching projects is diminishing supply at current projects. Most of this year's new projects will add supply near existing singlehouse, townhouse and condominium projects, he added.

In the first quarter of the year, AP will launch three projects including a condominium project in the Huai Kwang area near MRT Huai Khwang Station with 500 units worth 2 billion baht.

This coming weekend, AP will open sales at Baan Klang Muang Urbanion Kaset-Navamin 2 in the Lat Pla Khao area with 270 townhouses worth 1.1 billion baht. The Centro project in Rarm Intra will provide another 290 single houses worth 1.9 billion baht.

AP plans to spend from 3 billion to 4 billion baht on land for new projects this year and in the coming years. But it has not set a target for presales and revenue for 2010. To date it has a sales backlog of about 20 billion baht, 15 billion baht of which should be realised in 2010, said Mr Pumipat.

Finansia Syrus Securities last Friday estimated that AP realised 12.39 billion baht in revenue in 2009, an increase of 26% from 2008. The brokerage estimated AP's total presales for last year at 19 billion baht, up by 80% year-on-year,including 3.2 billion baht in the fourth quarter -2.2 billion from sales at four condominium projects and 1 billion from a townhouse project.

Finansia Syrus also anticipates a net profit of 552 million baht in the fourth quarter, up 62.8% quarter-on-quarter and 2.6% year-on-year and a net profit of 1.73 billion baht in 2009, up 5.15%year-on-year.

AP shares closed yesterday on the Stock Exchange of Thailand at five baht,unchanged, in trade worth 88.52 million baht.

Caption
The Baan Klang Muang Urbanion KasetNavamin 2 development will feature 270 townhouses worth 1.1 billion baht.

 

BANGKOK POST
27 January 2010