Company announces strong second quarter figures and says new Bangkok projects imminent
Property developer Raimon Land has reported a strong swing back to profitability in the second quarter of 2012 based on the first transfers from The River project in Bangkok. The company reported total revenues of Bt 1,141 million for the quarter and earnings before interest, tax, depreciation and amortization (‘EBITDA’) of just under Bt 200 million. Net profit after tax for the quarter was Bt 101 million.
Hubert Viriot, Chief Executive of Raimon Land commented: “We have sales contracts in hand worth over 11 billion baht for The River. With completion of the project we are now in a position to start transferring units and registering revenues in our accounts. The River transfers during the second half of this year and next year will contribute strongly to our bottom line. We’re very much back on track now – with a very promising outlook over the next few years.
Raimon Land’s luxurious ‘The River’ condominium project in Bangkok.
“Importantly the transfers will generate substantial cashflows,” he continued, “reducing our gearing and putting us in an excellent position to invest in a more aggressive growth strategy going forward.”
The Company has announced that it is already in advanced negotiations on a number of new land acquisitions in Bangkok with the intention of launching up to two new projects before year end. The total sales value of the new projects will be targeted at around Bt 2 to 3 billion.
“We are in final negotiations on a number of freehold plots, all within 200 metres of central stations on the BTS and MRT, “announced the Raimon Land CEO. “Our plan is to develop medium-to-high end projects at these locations with pricing in the 90,000 to 150,000 baht per square metre range. Unit prices will be between 2 to 10 million baht. Market positioning is under review – but we are considering The Lofts and Unixx brands.
“The plan is in line with our strategy of focusing more on mainstream Thai customer segments and of developing a rhythm of at least two new launches per year going forward,” he added.
Raimon Land currently has five projects at various stages of development with a total sales value of Bt 35.2 billion (equivalent to over US$1.1 billion). Although secured sales contracts at these projects were worth Bt 23.5 billion (or around US$750 million) up to the end of June 2012, due to Thai accounting rules only Bt 5.2 billion had so far been recognized as revenues in the Company’s accounts.
Raimon Land’s total secured sales backlog therefore reached approximately Bt 18.3 billion during the second quarter of 2012. Over half of the backlog related to sales at The River project, while just under one-third had been generated by sales at 185 Rajadamri, which together represent Raimon Land’s ultra-luxury flagship Bangkok projects.
Transfers at The River project commenced in June this year. Sales to the end of June 2012 at The River represented 77% of the project’s total saleable area, equivalent to Bt 11 billion in sales value. The ‘Vue’, a lifestyle shopping complex linked to The River project, with over 4,100 square metres of net lettable area is also now fully constructed and has achieved around 70% take-up to date, with tenants already commencing interior decoration.
Raimon Land CEO Hubert Viriot, right, announces details of the company’s financial performance at a press conference held August 15 in Bangkok.
The Company also reported strong sales progress at the 185 Rajadamri project during the last quarter, with 64% of its saleable area now contracted. The 185 Rajadamri project is due for completion and transfers by the end of next year. Construction of the superstructure has commenced and has reached the 16th floor. At an average Bt 250,000 per square metre, 185 Rajadamri is the highest priced condominium project in Bangkok.
Raimon Land’s Pattaya projects have also made rapid progress. The first building of the Zire Wongamat project is sold out. Northpoint, Zire Wongamat and Unixx South Pattaya were 88%, 68% and 27% sold respectively by the end of June. The Zire Wongamat and Unixx South Pattaya projects, both launched last year are due for completion and transfers in 2014 and 2015 respectively.