Mr Naporn Sunthornchitcharoen, senior executive vice president of Land & Houses Plc, revealed about its 2004 performance that its total revenue was 21,288 million baht (21.288 billion baht) and its net profit stood at 6,100.74 million baht (6.1 billion baht).

The housing market in 2004

In 2004, the housing market expanded continuously from the year before and housing registration in Greater Bangkok totaled 62,796 units, rising 24.1% from 2003. Of the total registration, self-built housing was 19,859 units, up 6.8%, and housing built by developers surged 34.2% to 42,937 units. Among housing units built by property developers in 2004, it can be classified as following;

• Detached house 26,631 units, jumping 48.7%
• Townhouse 13,360 units, rising 18.5%
• Condominium 2,185 units, up 14.5%

The housing expansion in 2004 was supported by several factors including;

• The steady economic growth stood at 6.25% in 2004, the continuing rise from 2003.
• Interest and inflation rates remained low despite some slight increases during the year. The minimum lending rate (MLR) of major commercial banks was 5.75% and the inflation rate was 2.7%.
• Housing demand was still high.

Housing Registration in Greater Bangkok during 2003-2004

Classified by operation	2003	2004	% change
Self-built housing	18,598	19,859	6.8%
Housing built by developers	31,996	42,937	34.2%
Total	50,594	62,796	24.1%

Classified by category	2003	2004	% change
Detached house	17,911	26,631	48.7%
Duplex	905	761	-15.9%
Townhouse	11,272	13,360	18.5%
Condominium	1,908	2,185	14.5%
Total	31,996	42,937	34.2%

The information was collected in Bangkok and five neighboring provinces of Samut Prakarn, Nonthaburi, Pathum Thani, Nakhon Pathom and Samut Sakhon
Source: Government Housing Bank

Meanwhile, there were a number of negative factors hurting the property market in 2004 as following;

• The fluctuation and sharp rise of oil price affected production costs
• Commercial banks were stricter to lend both pre-finance and post-finance to the property sector.
• The violence in three southern-most provinces
• The bird flu outbreak
• The competition in the property market was tougher and developers had used pricing strategies to compete with each other in the first and second quarters of 2004. However, the price war was gradually eased in the second half of the year as oil prices went up and development costs rose eventually.

The company's operating result in 2004

In 2004, the company delivered 3,300 houses to homebuyers. It had launched 25 housing projects since the early of the year, of which 21 projects were in Bangkok and four in upcountry. During the year, the company introduced 16 new housing projects, bringing the total projects to 41.

The outlook of housing market in 2005

The housing business is expected to grow with real housing demand in 2005, so that the market is forecast to have a steady expansion from 2004 with growth projection between 10-15%. The market expansion will be supported by positive factors including;

• The economic growth or GDP is predicted to rise 6%, a steady growth from 2004.
• Government investment will stimulate economic activities, particularly the investment in infrastructure projects to ease the traffic congestion, as this will be a boon for the housing market as well.
• Although interest rates are likely to increase this year, the levels remain low when compared to the rates during the previous property boom and the economic crisis. It is expected that interest rates will go up no more than 1%.
• Inflation rates between 3-3.5% are not likely to affect the overall housing market. However, this factor will depend on the fluctuation of oil prices as well.

Meanwhile, some negative factors are still underlying the housing market in 2005 such as;

• The sharp increase of oil prices, especially the float of diesel prices, will affect cost of housing developments.
• The trend of higher construction material prices will continue.
• Commercial banks are stricter to approve loans and mortgages for property developers and homebuyers.
• The lingering unrest in the South

The business plan in 2005

At the beginning of 2005, the company has a total of 28 ongoing residential projects in Bangkok and provinces. It has plans to launch additional 13 projects worth 28.032 billion baht during the year. In conclusion, the company will have a total of 41 housing projects underway in 2005.

The company will continue to emphasis on the strategy of Baan Sabai pre-built house and will aggressively focus on after-sales services. This will help differentiate and increase competitiveness for L&H. The company still has an inventory of houses at old development costs because it completes construction of the houses before launching sales. As a result, it can manage and control costs efficiently as well as revise pricing strategy to reflect market conditions all the time.

Moreover, this strategy will provide convenience for homebuyers to move in to their houses, having the completed community and living standard. By average, L&H customers will spend two months to move in to their houses, reflecting that they are real end-users.

L&H also recognizes the importance of research and development, especially the study of housing demand from homebuyers and their opinions toward house functions. The studies will get fresh information to help develop products and housing designs to meet with daily lifestyle of homebuyers in the future.

The company still develops housing projects under the concept of Baan Sabai pre-built houses. It also concerns every detail of the project developments to reduce potential risks. It will start from a feasibility study of market potential, housing demand in each location, product and price segmentation and opinion of homebuyers toward housing designs. These factors will be taken into account and construction plans will be drafted to get along with sales activities from time to time.

The other important factor is systematic and action plans will be laid down to serve the company's objective, mission and policy in all aspects such as human resource, production, marketing and finance. The internal control and development system will be included to make works be done quickly and efficiently.

Mr Adisorn Thananun-narapool, senior executive vice-president of Land & Houses Plc, revealed about the 2004 performance of the company and subsidiaries that the total revenue was recorded at 21.288 billion baht, up 838 million baht or 4% from 20.45 billion baht in 2003.

However, specific business tax was returned to its normal rate at 3.3% in 2004, making the company to pay more taxes from 22 million baht in 2003 to 705 million baht in 2004. This made the company's net profit increased slightly.

In 2004, the company spent almost 4 billion baht to acquire new land plots and paid dividends totaling 7,692.34 million baht to shareholders two times.

The first dividend payment was made on May 27, 2004 from accumulated profits and operating results in 2003. The payment was 0.70 baht per shares or the total of 5,313.89 million baht. The second dividend payment was on September 13, 2004 at 0.30 baht per share or the total of 2,378.45 million baht.

As of the end of 2004, the company and subsidiaries had total assets worth 36.845 billion baht, rising 5.452 billion baht from 31.393 billion baht at the end of 2003. Its debt-to-equity ratio stood at 0.51 times at the end of 2004, up from 0.29 times at the end of 2003.

For its financial plan in 2005, the company has plans to issue bonds to raise funds from the capital market. Bills of exchanges will be issued for short-term loans while long-term loans will be funded by debentures. The company will issue debentures worth 5 billion baht near the end of first quarter of 2005.

The company has set aside a budget worth 3-4 billion baht for land acquisition this year and another 1 billion baht is set for the other investments including the additional injection into the property fund. It is predicted that the D/E ratio at the end of 2005 will stay around 0.5-0.6 times.