The listed developer Quality Houses Plc is downsizing its investment budget to its lowest level in eight years due to the country's sluggish economy, said CEO Rutt Phanijphand.
The company has an investment budget of 800 million baht for 2009, a fall of 80% year-on-year. Quality Houses normally has a yearly budget of three to four billion baht, mainly used for buying land.
"We will delay buying land under the economic gloom this year. Our existing land is enough for developing projects over the next two years," said Mr Rutt. QH plans to launch nine residential projects this year.
Cost controls, cash flow management and financial restructuring are other key business strategies for developers while the economy is weak.
Quality Houses will use bank credit lines rather than its own cash for project investment this year. The company will also closely monitor global and local economic indicators while preparing its strategy.
Mr Rutt said the company was unconcerned about residential project sales to high-end customers due to their strong purchasing power. But it may need to revise business strategies for its less affluent customers, who are likely to be affected by the sluggish economy.
He said the government's proposed asset taxes would benefit property developers by reducing land price speculation, leading to more reasonable property prices.
QH, one of the country's leading developers, expects total revenue of around 11 billion baht in 2009, with no growth in 2008. But it forecasts net profit rising around 12-15% from last year. Currently, the company is ranked fourth in the industry according to revenue.
Quality Houses plans to offer debentures worth 1.3 billion baht in February or March. Proceeds will be used to pay off short-term debts. The company may issue another 2.5 billion baht worth of bonds late this year, depending on market demand.
The company is planning to launch sales in May for the QH Condo-Sathorn luxury condominium near the Charoen Nakhon BTS station.
QH shares closed yesterday on the SET at 0.94 baht, down one satang, in trade worth 61.84 million baht.
source : www.bangkokpost.com |
