Ananda Development PCL announces third quarter profits up 56% year on year to 252 million Baht on revenues up 12% over the previous year. Also reported presales beating guidance by 36% for the quarter and raising the full year presales target by 5% to 22,057 million Baht
Ananda Development Public Company Limited announces net profits of 252 million Baht for the third quarter, an increase of 56% over the same quarter a year earlier and an increase of 20% from the previous quarter. The company generated 2,979 million Baht in revenue, an increase of 12% over the same quarter a year earlier. In addition, the company also reported strong presales from both new launches and existing projects with presales 36% above guidance at 5,082 million Baht. The company raised full year presales target by 5% despite postponing 3 projects with a combined project value of 2.5 billion Baht originally scheduled to launch in the fourth quarter to the first quarter of next year.
During the quarter the company launched four new condominium projects, with a total development value of 6.5 billion Baht. Comprising the 3.2 billion Baht Ideo Mobi Asoke condominium project near the Phetchaburi MRT station, the 861 million Baht Venio Sukhumvit 10, near the Nana BTS station. In addition, the company launched more “Unio” branded condominiums, which were the 1.5 billion Baht Unio Sukhuvmit 72 near the Bearing BTS station and the 1 billion Baht Unio Rama2-Thakham opposite Central Rama2 Shopping Mall. Take up rates remained within or ahead of company expectations with over 70% of the units released were sold at launch for Ideo Mobi Asoke and over 90% sold at launch for Venio Sukhuvmit 10.
Including sales from existing projects the company generated total presales for the quarter of 6.9 billion Baht, 36% above guidance for the quarter. Presales for the first nine months totaled 15.2 billion Baht, representing 73% of the company’s initial annual presales target of 21 billion Baht.
The company ended the quarter with a record backlog of 41.3 billion Baht, due to transfer over the next 3 years, up 14% from the same quarter a year earlier.
3rd quarter transfers including Ananda share in a Joint Venture were 2.9 billion Baht, 35% higher than the company guidance of the quarter. The company’s net profits were 252 million Baht for the quarter, an increase of 56% year on year. The company’s net margin was 8% for the quarter, an improvement from the 6% in the same quarter last year. The company still maintains its guidance for total annual transfers for the year between 15 – 16 billion Baht.
The company has adjusted its 4th quarter launch plan and moved the launch of 3 projects worth 2.5 billion Baht from the 4th quarter of 2016 to the first quarter of 2017. This has reduced the total launches expected to 20,650 million Baht from a total previous launch target of 21,789 million Baht.
Also, despite the reduction in launches in the 4th quarter the company raised its full year presales target from 20,952 million Baht to 22,057 million Baht
Commenting on the presales, Mr. Chanond Ruangkritya, Chief Executive Officer for Ananda, stated, “Presales for the quarter were stronger than expected. The new projects have been well received and we expect them to continue to sell steadily. We have exceeded by 36% our quarterly presales target in the third quarter with four new projects launching in the quarter.”
Mr. Chanond Ruangkritya, CEO of Ananda, said, “We have maintained financial discipline and achieved this growth without adding risk and maintained our net interest bearing debt to equity at only 0.8:1.”
Commenting on the results Ms. Muntana Au-kitkajorn, Chief Financial Officer for Ananda Development said, “The transfers’ results exceeded our expectations. In particular, Ideo Mobi Wongsawang Interchange and Ideo Q Chula-Samyan finished construction and started to transfer ahead of schedule in the third quarter instead of the fourth quarter as expected. Ideo Mobi Sukhuvmvit Eastgate also completed construction and started to transfer in the quarter as expected. Profits grew more strongly than revenue as the company continued to control costs in the quarter, with selling, general and administration costs falling to 20% of revenue in the quarter from 23% in the same quarter a year ago despite the company’s rapid growth.”
She continued, “Our cash flow remains strong and we have maintained a large cash balance with over 2 billion Baht in cash at the end of the quarter. We have continued to have strong support from our banks and have multiple options in place to fund the cash needs of the company through the year depending on how the situation evolves. In October 2016, we issued 3 bonds of 3 billion Baht with tenor 1, 3 and 5 years, supporting the growth and working capital for the business. Our latest 3 bonds issued bring record low cost of debt with the 1 year bond issued at only 3.05%. Our financial discipline has been recognized by TRIS Ratings with our corporate credit rating at “BBB” with stable outlook.
In October 2016, the company leased a land plot on Rachadapisek Road (The new CBD Area) with 3 rai, 1 ngan and 67 sqw and plan to develop a mixed-use real estate development project for retail, residential, or hotel purposes. The official operating period will begin in approximately the first quarter of 2020.
The company also released its initial business plan for 2017. It stated that it expects to see transfers from real estate increase by the equivalent of 66% next year when the contribution from 10 new condominium buildings finishing construction and beginning to transfer in 2017 compared to 5 new condominiums finishing in 2016. This leads the company to expect total residential transfers of around 25 billion Baht, up from an expected 15.1 billion Baht this year. This will result in residential revenues to the company expected to be 11.7 billion Baht in 2017
Due to the company’s capital cycle the year will see an increase in new projects launched with a total project value of new launches projected to increase by 74% up around 36 billion Baht compared to 20.7 billion Baht in 2016. The company will launch 17 new projects. 10 of the projects will be condos, 7 of which will be joint ventures and 7 projects will be housing. The rise in launch value means the company expects total presales for the year to increase by 35% to 29.8 billion Baht in 2017 compared to 22 billion this year.
The company expects to keep its preferred measure of leverage, Net Interest Bearing Debt to Equity, at 1:1 for the year, exactly at management’s long term target.
Mr. Chanond Ruangkritya, CEO of Ananda, said, “We are delighted to continue to achieve such strong results in the quarter and in particular that we are maintaining our growth and performance while maintaining a strong discipline on costs and borrowing. Ananda is the market leader in urban living solutions in the Thai market and through the constant innovations in both building design and every other aspect of real estate development we aim to maintain our leadership in the condominium market. 2017 is the continuation of what we refer to as our “Harvest Period”. We are beginning to see the investment made after the IPO come through as rapid growth in transfers. We have ten condominium buildings finishing construction and beginning to transfer in 2017 compare to five condominium finishing in 2016. In addition, we are pleased to have acquired a site for the first mixed use project since the company’s inception in 1999. This new business will allow Ananda to have a more diversified revenue base and more recurring income.”