Company News
1H’15 NET INCOME OF BAHT 1,612.4 MILLION DESPITE CHALLENGING ECONOMIC ENVIRONMENT (NORMALIZED NET INCOME (NNI) OF BAHT 1,695.0 MILLION)
14/08/2015
- 1H’15 NET INCOME OF BAHT 1,612.4 MILLION DESPITE CHALLENGING ECONOMIC ENVIRONMENT
- (NORMALIZED NET INCOME (NNI) OF BAHT 1,695.0 MILLION)
Hemaraj Land And Development Public Company Limited announced its operating and financial results for 1H’15 as summarized below.
Net Income
For 2Q’15, Hemaraj reported Total Net Income of Baht 931.0 million, a decrease of 9% compared with the same period of the previous year. Earnings per-share was Baht 0.094 per share, representing a decrease of 11%. Normalized Net Income (NNI) for 2Q’15 was Baht 1,069.8 million (excluding unrealized foreign exchange loss of Baht 138.78 million), or an increase of 5%.
For the first half of 2015, Hemaraj reported Total Net Income of Baht 1,612.4 million, a decrease of 29 compared with the same period of the previous year. Earnings per-share was Baht 0.163 per share, representing a decrease of 31%
Net profit decreased compared to 1H’14 due mainly to lower land transfers in 1H’15 as a result of soft land sales from weak economic environment both locally and export markets. In addition, non-cash unrealized foreign exchange translation loss of Baht 82.6 million from power investment (this is accounting expense with no effect on cash). However, revenue from utilities services and revenue from industrial properties for rent continued to improve. As a result, Hemaraj has a reported net profit margin of 59.6%, compared to 53.3% in 1H’14, despite lower revenues. (Normalized net profit margin increased to 62.6% compared to 51.8% in 1H’14)
Mr. David Nardone, President & CEO of Hemaraj Land And Development Public Company Limited had the following comments on the company’s performance.
“Hemaraj Land And Development Public Company Limited finished the first 6 months of 2015 with reasonable operating and financial results in the content of the overall Thailand economic environment. Industrial Estate revenue was lower by 55%, as revenue is based on industrial land transfers. However, Rental Property revenue increased 10% from the same period of 2014. Revenue from industrial estate utilities (non power) also increased by 1% from the same period of 2014.
Industrial Estate land sales for 1H’15 were 356 rai (142 acres or 57 hectares), with 13 contracts, 10 new customers and 3 project expansions from existing customers. Sixty two percent of the contracts in 1H’15 were non automotive.
Weaknesses in the domestic OEM automotive sales were down 16% and automotive OEM production volume decreasing 2% while automotive exports increased 3% in 1H’15. Automotive export value increased 2% compared with the previous year quarter auto value. However, automotive in total was 14.82% of total exports. There continues to be longer term new product launches, although with some delays, and technology intensive automotive investments. Increasingly Hemaraj is the choice of leading multinational investment. The ECO Car 2 program applications were approved for four (4) Hemaraj automotive OEM manufacturers.
For 1H’15, Ready Built Factories were flat totaling 300,634 square meters under rental inclusive of the Hemaraj Property Fund. Hemaraj Logistics Parks for Rent increased net 1,343 square meters or 2% from 2014 cumulative balance.
In Power, Gheco-One, a 660 MW IPP (Independent Power Producer) project with Hemaraj 35% shareholding and Glow Energy 65% (GDF Suez group), operated at 73% commercial dispatch availability in 1H’15 due to planned 1Q’15 major maintenance 5 weeks and 6-day unplanned shut down in 2Q’15. Hemaraj received share of profit from power/utility associates (excluding foreign exchange unrealized translation gain/loss) at Baht 771.0 million, or a decrease of 16% from the same period of 2014. Hemaraj also signed shareholder agreements with B.Grimm and Gulf Energy Development (GED) in the first quarter of 2015 to develop another 7 SPP power projects expecting COD starting from 2017 onwards. The investment will increase Hemaraj’s equitable operating capacity from 318 MW to 538 MW by 2019.
As reported after the close of the quarter, on April 20, 2015 WHA Venture Holding Company Limited, a fully owned subsidiary of WHA Corporation Public Company Limited completed their voluntary tender offer for 92.88% of the total shares of Hemaraj Land And Development Public Company Limited. This was after acquiring an initial 22.53% of the shares in a mutual agreement from two of the founding Hemaraj shareholders.
The combined leadership of WHA and Hemaraj will provide enhanced opportunities in providing complete industrial estate, utility, power, and logistics property solutions for our customers and in ensuring our joint success going forward.
Hemaraj has broad revenue in core business areas: - industrial estates, utilities, power, and property. Our 1H’15 operating and financial results, despite the challenging economic environment, demonstrate the profitability from these recurring investments. Our strategy remains to provide superior long term returns to shareholders.”
Revenue and Results of Operations for first half of 2015
For the first half of 2015, Hemaraj Total Revenue was Baht 2,706.1 million compared with Baht 4,285.9 million for the same period of 2014, representing a 37% decrease. Total Operating Revenue from core business was Baht 2,717.2 million, a 37% decrease from the same period of 2014. Industrial Estate Land Sales for 1H15 were Baht 1,232.1 million, or a 55% decrease, with a gross margin of 56%. This included revenue from sales of investment properties Baht 33.5 million. The backlog in deferred revenue is Baht 1,763 million, with recognition based on the title transfer date, from Industrial Estate land sales not recognized to date representing sales that will be recognized primarily over the next 3 to 12 months.
Industrial estate utilities increased to Baht 878.0 million, or an increase of 1%. Total Utilities which includes industrial estate utilities, dividend from power utilities associates, and other utilities and services fees increased to Baht 1,014.2 million, an increase of 13%.
Total Rental Property and Services Revenue including ready built factory rental, logistics parks rental, pipe-rack rental, and commercial office rental increased to Baht 471.0 million, a increase of 10%. This was mainly from the increase in Ready Built Factory Rental to Baht 255.8 million, higher by 18%. Logistics Parks Rental improved to Baht 77.2 million, an increase of 15%. Pipe-rack rental also improved to Baht 75.7 million, an increase of 18% and due to higher occupancy rates and rental rate.
The Gross Profit was Baht 1,500.1 million. Earnings before Interest Tax Depreciation and Amortization (EBITDA) were Baht 1,508.2 million for 1H15. The Gross Profit Margin and EBITDA Margin were 55% and 56%, respectively.
Significant Activities for first half of 2015
• Industrial Estate Land Sales were 356 rai with 13 contracts, 10 new customers and 3 project expansions from existing customers. Hemaraj now has 656 distinct new customers with 988 contracts including 228 automotive customers with 347 automotive contracts.
• Ready Built Factories decreased net 1,436 square meters totaling 300,634 square meters under rent. This comprises of 190,412 square meters at Hemaraj companies and 110,222 square meters rented under the 2014 year-end Hemaraj Property Fund (Hemaraj 23.12% share).
• Hemaraj Logistics Parks for Rent increased net 1,343 square meters or 2% from 2014 cumulative balance, totaling 83,778 square meters under rent.
• Gheco-One, a 660 MW IPP coal project with Hemaraj 35% shareholding and Glow Energy 65% (GDF Suez group), operated at 73% commercial availability due to planned 1Q’15 major maintenance 5 weeks and 6-day unplanned shut down in 2Q’15
Activities after Quarter 2, 2015
• The Board of Directors approved the declaration of interim dividends from the operating results and sale of non-core assets from 1 January 2015 to 1 March 2015 at Baht 0.443 per share paid on 31 July 2015.
• The Board of Directors considered the delisting of the Company from the Stock Exchange of Thailand, after having received the tender offer for the entire securities of the Company from WHA which currently holds 92.88% of the Company shares and proposed to the Shareholders' Meeting to consider such matters. The Extraordinary General Meeting of Hemaraj Shareholders to consider whether to approve this or not will be held on 30 September 2015.
Balance Sheet Highlights for the first half period ended 30th June 2015
At 30th June 2015, Hemaraj reported Total Assets of Baht 35,863 million, Total Liabilities of Baht 19,260 million and Total Shareholders’ Equity of Baht 16,603 million. The Net Debt to Equity ratio was 0.99 to 1 with Cash and Deposits on Hand of Baht 2,748 million.
- (NORMALIZED NET INCOME (NNI) OF BAHT 1,695.0 MILLION)
Hemaraj Land And Development Public Company Limited announced its operating and financial results for 1H’15 as summarized below.
Net Income
For 2Q’15, Hemaraj reported Total Net Income of Baht 931.0 million, a decrease of 9% compared with the same period of the previous year. Earnings per-share was Baht 0.094 per share, representing a decrease of 11%. Normalized Net Income (NNI) for 2Q’15 was Baht 1,069.8 million (excluding unrealized foreign exchange loss of Baht 138.78 million), or an increase of 5%.
For the first half of 2015, Hemaraj reported Total Net Income of Baht 1,612.4 million, a decrease of 29 compared with the same period of the previous year. Earnings per-share was Baht 0.163 per share, representing a decrease of 31%
Net profit decreased compared to 1H’14 due mainly to lower land transfers in 1H’15 as a result of soft land sales from weak economic environment both locally and export markets. In addition, non-cash unrealized foreign exchange translation loss of Baht 82.6 million from power investment (this is accounting expense with no effect on cash). However, revenue from utilities services and revenue from industrial properties for rent continued to improve. As a result, Hemaraj has a reported net profit margin of 59.6%, compared to 53.3% in 1H’14, despite lower revenues. (Normalized net profit margin increased to 62.6% compared to 51.8% in 1H’14)
Mr. David Nardone, President & CEO of Hemaraj Land And Development Public Company Limited had the following comments on the company’s performance.
“Hemaraj Land And Development Public Company Limited finished the first 6 months of 2015 with reasonable operating and financial results in the content of the overall Thailand economic environment. Industrial Estate revenue was lower by 55%, as revenue is based on industrial land transfers. However, Rental Property revenue increased 10% from the same period of 2014. Revenue from industrial estate utilities (non power) also increased by 1% from the same period of 2014.
Industrial Estate land sales for 1H’15 were 356 rai (142 acres or 57 hectares), with 13 contracts, 10 new customers and 3 project expansions from existing customers. Sixty two percent of the contracts in 1H’15 were non automotive.
Weaknesses in the domestic OEM automotive sales were down 16% and automotive OEM production volume decreasing 2% while automotive exports increased 3% in 1H’15. Automotive export value increased 2% compared with the previous year quarter auto value. However, automotive in total was 14.82% of total exports. There continues to be longer term new product launches, although with some delays, and technology intensive automotive investments. Increasingly Hemaraj is the choice of leading multinational investment. The ECO Car 2 program applications were approved for four (4) Hemaraj automotive OEM manufacturers.
For 1H’15, Ready Built Factories were flat totaling 300,634 square meters under rental inclusive of the Hemaraj Property Fund. Hemaraj Logistics Parks for Rent increased net 1,343 square meters or 2% from 2014 cumulative balance.
In Power, Gheco-One, a 660 MW IPP (Independent Power Producer) project with Hemaraj 35% shareholding and Glow Energy 65% (GDF Suez group), operated at 73% commercial dispatch availability in 1H’15 due to planned 1Q’15 major maintenance 5 weeks and 6-day unplanned shut down in 2Q’15. Hemaraj received share of profit from power/utility associates (excluding foreign exchange unrealized translation gain/loss) at Baht 771.0 million, or a decrease of 16% from the same period of 2014. Hemaraj also signed shareholder agreements with B.Grimm and Gulf Energy Development (GED) in the first quarter of 2015 to develop another 7 SPP power projects expecting COD starting from 2017 onwards. The investment will increase Hemaraj’s equitable operating capacity from 318 MW to 538 MW by 2019.
As reported after the close of the quarter, on April 20, 2015 WHA Venture Holding Company Limited, a fully owned subsidiary of WHA Corporation Public Company Limited completed their voluntary tender offer for 92.88% of the total shares of Hemaraj Land And Development Public Company Limited. This was after acquiring an initial 22.53% of the shares in a mutual agreement from two of the founding Hemaraj shareholders.
The combined leadership of WHA and Hemaraj will provide enhanced opportunities in providing complete industrial estate, utility, power, and logistics property solutions for our customers and in ensuring our joint success going forward.
Hemaraj has broad revenue in core business areas: - industrial estates, utilities, power, and property. Our 1H’15 operating and financial results, despite the challenging economic environment, demonstrate the profitability from these recurring investments. Our strategy remains to provide superior long term returns to shareholders.”
Revenue and Results of Operations for first half of 2015
For the first half of 2015, Hemaraj Total Revenue was Baht 2,706.1 million compared with Baht 4,285.9 million for the same period of 2014, representing a 37% decrease. Total Operating Revenue from core business was Baht 2,717.2 million, a 37% decrease from the same period of 2014. Industrial Estate Land Sales for 1H15 were Baht 1,232.1 million, or a 55% decrease, with a gross margin of 56%. This included revenue from sales of investment properties Baht 33.5 million. The backlog in deferred revenue is Baht 1,763 million, with recognition based on the title transfer date, from Industrial Estate land sales not recognized to date representing sales that will be recognized primarily over the next 3 to 12 months.
Industrial estate utilities increased to Baht 878.0 million, or an increase of 1%. Total Utilities which includes industrial estate utilities, dividend from power utilities associates, and other utilities and services fees increased to Baht 1,014.2 million, an increase of 13%.
Total Rental Property and Services Revenue including ready built factory rental, logistics parks rental, pipe-rack rental, and commercial office rental increased to Baht 471.0 million, a increase of 10%. This was mainly from the increase in Ready Built Factory Rental to Baht 255.8 million, higher by 18%. Logistics Parks Rental improved to Baht 77.2 million, an increase of 15%. Pipe-rack rental also improved to Baht 75.7 million, an increase of 18% and due to higher occupancy rates and rental rate.
The Gross Profit was Baht 1,500.1 million. Earnings before Interest Tax Depreciation and Amortization (EBITDA) were Baht 1,508.2 million for 1H15. The Gross Profit Margin and EBITDA Margin were 55% and 56%, respectively.
Significant Activities for first half of 2015
• Industrial Estate Land Sales were 356 rai with 13 contracts, 10 new customers and 3 project expansions from existing customers. Hemaraj now has 656 distinct new customers with 988 contracts including 228 automotive customers with 347 automotive contracts.
• Ready Built Factories decreased net 1,436 square meters totaling 300,634 square meters under rent. This comprises of 190,412 square meters at Hemaraj companies and 110,222 square meters rented under the 2014 year-end Hemaraj Property Fund (Hemaraj 23.12% share).
• Hemaraj Logistics Parks for Rent increased net 1,343 square meters or 2% from 2014 cumulative balance, totaling 83,778 square meters under rent.
• Gheco-One, a 660 MW IPP coal project with Hemaraj 35% shareholding and Glow Energy 65% (GDF Suez group), operated at 73% commercial availability due to planned 1Q’15 major maintenance 5 weeks and 6-day unplanned shut down in 2Q’15
Activities after Quarter 2, 2015
• The Board of Directors approved the declaration of interim dividends from the operating results and sale of non-core assets from 1 January 2015 to 1 March 2015 at Baht 0.443 per share paid on 31 July 2015.
• The Board of Directors considered the delisting of the Company from the Stock Exchange of Thailand, after having received the tender offer for the entire securities of the Company from WHA which currently holds 92.88% of the Company shares and proposed to the Shareholders' Meeting to consider such matters. The Extraordinary General Meeting of Hemaraj Shareholders to consider whether to approve this or not will be held on 30 September 2015.
Balance Sheet Highlights for the first half period ended 30th June 2015
At 30th June 2015, Hemaraj reported Total Assets of Baht 35,863 million, Total Liabilities of Baht 19,260 million and Total Shareholders’ Equity of Baht 16,603 million. The Net Debt to Equity ratio was 0.99 to 1 with Cash and Deposits on Hand of Baht 2,748 million.