Land & Houses posted a consolidated net profit of 1.167 billion baht , during the third quarter of this year a 131% rise year-on-year, on sales totaling 4.089 billion baht. The total sales during the first nine months of this year topped 11 billion baht and a net profit was 2.735 billion baht.

Mr Anant Asavabhokhin, president of L&H, said the new housing registration in Bangkok and neighboring areas during the first eight months of 2002 grew 3.2% to 24,111 units from the same period last year. Of the total, 12,537 units were built by individuals and the remaining 11,574 units by property developers. It is forecast that the total housing units developed by developers will reach 17,500 units by the end of this year, only 12.4% of the market peak in 1995. This means that the housing market still has a lot of chances to grow more over the next few years before the figure reaching the pre-crisis level.

Type 1995 1996 1997 1998 1999 2000 2001 2002 (F) 2001Jan-Aug 2002Jan-Aug
Built by individuals 32,118 28,059 27,418 22,716 15,497 18,064 19,639 19,000 12,809 12,537
Built by developers 140,301 138,726 117,937 41,148 17,885 13,964 14,384 17,500 10,559 11,574
Total 172,419 166,785 145,355 63,864 33,382 32,028 34,023 36,500 23,368 24,111

For detached houses between January to August this year, the sector grew 30% to 4,960 units from 3,817 units during the same period last year. In general, the figure of detached houses currently was only 35% of the peak in 1995 but L&H transferred completed houses to homebuyers almost a 100% increase from the level in 1995.

Detached house 1995 1996 1997 1998 1999 2000 2001 2002 (F) 2001Jan-Aug 2002Jan-Aug
Market 20,793 19,332 14,798 3,356 2,797 6,489 5,802 7,500 3,817 4,960
L&H 1,216 1,411 1,387 1,271 823 1,084 1,711 2,250 1,045 1,500

The townhouse sector between January to August this year saw a 102% jump to 4,885 units from 2,423 units during the same period of the year before. In this category, L&H does not have any market share. The company used to have over 1,600 units transferred to buyers in 1996.

Townhouse 1995 1996 1997 1998 1999 2000 2001 2002 (F) 2001Jan-Aug 2002Jan-Aug
Market 58,093 57,956 42,678 9,833 1,598 1,669 3,785 7,300 2,423 4,885
L&H 1,350 1,642 1,412 557 337 180 13 0 13 0

The condominium sector experienced a 60% contraction to 1,723 units from 4,287 units during the same period last year. The existing stocks have been absorbed while new supply is not sufficient to serve demand.

Townhouse 1995 1996 1997 1998 1999 2000 2001 2002 (F) 2001Jan-Aug 2002Jan-Aug
Market 60,477 60,744 59,561 27,788 13,416 5,633 4,693 2,600 4,287 1,723
L&H 0 0 1 66 131 50 2 0 1 0

Mr Anant was confident that the housing market would continue to expand until next year and demand would remain strong. Positive factors driving the growth are housing prices do not adjust any more while banks have competed heavily to extend home loans with special down payments and low interest rates to attract homebuyers.

For the business plan next year, L&H will concentrate on developing detached houses and at the same time studying potential to enter the townhouse and condominium sectors. The company did not focus in these segments for a long time.

Mr Anant has some comments that the government should extend the implementation of property tax incentives, which are scheduled to expire by the year-end, for another one year to spur property activities.

Mr Adisorn Thananun-narapool, executive vice president of L&H, said the company posted a net profit of 1.167 billion baht during the third quarter of this year, a 131% surge from 504 million baht in the same period last year. The net profit for the first nine months of this year was 2.735 billion baht, up 106% from the same period last year. The nine-month sales this year totaled 11.239 billion baht, up 55% year-on-year. L&H is very optimistic that the housing market will be boosted further and it plans to develop at least 10 new housing estates next year.

Contributing to the 131% jump in net profits in the third quarter this year was as following;

  1. The company and subsidiaries recorded 4.089 billion baht in sales revenues from the transfer of completed houses to buyers, a 55% rise from 2.624 billion baht in the third quarter of last year. It was the highest quarterly sales of L&H.
  2. The sales and administration expenses of L&H and subsidiaries declined to only 7.5% of the total sales in the third quarter of this year, compared to 10.3% in the third quarter last year. This was because the company had the better and effective internal management system to cope with more works while the expenses did not increase any more.
  3. Interest expenses of L&H and subsidiaries in the third quarter of this year reduced 59 million baht due mainly to the lower debt burdens and lower financial costs. L&H mobilized new funds from issuing debentures and bills of exchanges.

About the company's financial status, Mr Adisorn said L&H and subsidiaries had declining debts during the first nine months of this year. The company repaid debts of 1.8 billion baht to creditors while its shareholders' equity rose 3.6 billion baht. The debt to equity ratio fell from 0.73:1 at the end of last year to 0.47:1 at the end of September this year.

L&H had cash on hands and short-term investment budgets rise almost 800 million baht from the end of last year.

Next year, L&H has set aside 3.6 billion baht as a budget to buy new land plots for future developments. Some will be reserved for dividend payments to shareholders and some three billion baht will be repaid more debts.

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