HEMARAJ – FIRST HALF 2012 REVENUE OF BAHT 3,189 MILLION UP 123% Y-o-Y

–          FIRST HALF 2012 NET INCOME OF BAHT 954.5 MILLION WITH NORMALIZED NET INCOME (NNI) OF BAHT 963.1 MILLION

–          INDUSTRIAL ESTATE LAND SALES OF 1,447 RAI UP 88% Y-o-Y INCREASES 2012 INDUSTRIAL LAND TARGET TO RECORD 2,300 RAI

 

Hemaraj Land And Development Public Company Limited announced its operating and financial results for the first half of 2012 as summarized below.

 

Net Income

 

For Quarter 2’2012, Hemaraj reported Total Net Income of Baht 93.5 million, or an increase of 201% compared with the same period of last year.  Earnings per-share was 0.010 Baht per share, representing an increase of 233% from the same period of last year.  Normalized Net Income (NNI) for Quarter 2’ 2012 was Baht 232.3 million.

 

For the first 6 months of 2012, Hemaraj reported Total Net Income of Baht 954.5 million, or an increase of 50335 % compared with the same period of 2011.

 

The Increase of Net Income for the first 6 months of 2012 was due to growth in most areas of business, particularly industrial estates.  Higher industrial estate sales and land transfers resulted in higher revenue recognition. There was also stronger growth in Industrial Utilities and Rental Properties. In addition, there was an unrealized foreign exchange translation loss for Gheco-One of Baht -8.6 million and Baht -94.9 million in 2012 and 2011, respectively.  Normalized Net Income (NNI) for the first 6 months of 2012 was Baht 963.1 million.

 

David Nardone, President and 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 half of 2012 with strong overall results. The operating business, the last 6 quarters, have been at record levels and the revenue recognition has now caught up based on industrial estate land transfers.  Industrial Estate land sales revenue was up 397% reflecting this.  In addition, our broad revenue reflected an Industrial Estate Utilities revenue increase of 14% as factory capacity recovered from 2011, as well as a 49% Ready Built Factory rental revenue increase, both being over the prior year.

 

Investment from the automotive industry remains strong, along with broader participation in logistics, electronics, consumer and others.  The booming automotive production in Thailand for 2012 will recover to 2.2 million vehicles in 2012 and to 2.5 to 3.0 million vehicles over the next 2 to 5 years.

Japan has continued to lead with over half of our customer investment the last 10 quarters.  For the first 6 months of 2012, record operating results were Industrial Estate Sales of 1,447 rai (572.1 acres or 231.5 hectares), #1 market share with 67 contracts, 44 new customers and 23 project expansions from existing customers.  With these operating results reflected, we are increasing for the third time our 2012 industrial estate sales forecast to 2,300 rai from our original 2012 budget of 1,500 rai.

Ready Built Factories for Rent grew by 31,038 square meters or a 20% increase from the 2011 year-end cumulative balance, with another 31,565 square meters pre-leased, in line with both our aggressive construction plan and market expectations.  We have launched 4 Hemaraj Logistics Parks inside or near 3 of our Eastern Seaboard industrial estates over the last 12 months.

The first 6 months of 2012 revenue performance was Total Revenue of Baht 3,189.2 million, a 123% increase from the same period of 2011 due to the factors noted above.  Total Net income was Baht 954.5 million or on a Normalized Net Income (NNI) basis, taking out swings in Unrealized Foreign Exchange, Baht 963.1 million, comparable to the NNI for the first 6 months of 2011 of Baht 93.5 million.

In power development, our Gheco-One 660 MW IPP power plant investment COD (commercial operation date) was 26 July 2012, being later than our expectations.

The investment policy of Hemaraj continues in core business areas – industrial estates, utilities, power, and properties.  The overall operating and revenue performance reflect the increasing broadened revenue growth opportunities that we are pursuing.

We are cognizant of challenging global conditions and a potential investment slowdown for export markets.  However, we are less exposed to organic growth only, due to the relocation and rationalization of capital to Thailand due to cost currency and particularly access to automotive and other markets.  The improving risk profile of the company and the predictability of the earnings and dividends are at an opportune time.  Our strategic vision remains to provide superior long term returns to shareholders.”

 

Revenue and Results of Operations for 6 months, 2012

 

For the first half of 2012, Hemaraj’s Total Revenue was Baht 3,189.2 million compared with Baht 1,427.2 million for the same period of 2011, representing 123% increase.  Total Operating Revenue from core businesses was Baht 3,202.4 million, a 120% increase from the same period of 2011.  Industrial Estate Land Sales for first half of 2012 were Baht 2,102.9 million or a 397% increase. In addition, there is an additional Baht 3,313 million in deferred revenue, with recognition based on the transfer date, from Industrial Estate land sales not recognized to date representing sales that will be recognized primarily over the next 3 to 24 months.

 

Industrial estate utilities increased to Baht 664.6, or an increase of 14% reflecting the higher volume. Total Utilities which includes industrial estate utilities, dividend from power utilities associates, and other utilities and services fees increased to Baht 673.2 million, an increase of 13%. Total Rental Property and Services Revenue including ready built factory rental, logistic park rental, pipe-rack rental, and commercial office rental increased to Baht 340.7 million, an increase of 24%.  Sale of Property including ready built factory sales, residential sales and other land/property sales decreased to Baht 85.5 million, a decrease of 47%.

 

The Gross Profit was Baht 1,461 million, a 134% increase from the same period of last year.  Earnings Before Interest Tax Depreciation and Amortization (EBITDA) were Baht 1,143.2 million. The Gross Profit Margin and EBITDA Margin were 46% and 36%, respectively.

 

Significant Activities for 6 Months of 2012

• Industrial Estate Sales were 1,447 rai with 67 contracts, 44 new customers and 23 project expansions from existing customers, all records level. Hemaraj now has 519 distinct new customers with 784 contracts including 177 automotive customers with 274 automotive contracts.
• Power Investments continued with Hemaraj’s 35% shareholding in GHECO-One IPP power project commercial operation since 26 July 2012. In March 2012, Hemaraj signed the Shareholders’ Agreement with Gulf JP to invest 25% in the 126MW SPP Power Plant in Hemaraj Rayong Industrial Park.

• Ready Built Factories for Rent increased 20% or 31,038 square meters from 2011 year-end cumulative balance with an additional 31,565 square meters pre-leased.
• Hemaraj was included in the SET50 Index from the third quarter of 2012.
• Hemaraj announced the acquisition of the land at Koh Lan Pattaya Thailand of 228.15 Rai for an integrated resort leisure and entertainment real estate development.

 

Activities after Quarter 2, 2012

• The Board of Directors has approved the interim dividends from the operating results from 1 January 2012 to 30 June 2012 at Bath 0.04 per share to be payable on 7 September 2012.

 

Balance Sheet Highlights for the 6-month period ended 30^th June 2012

 

At 30th June 2012, Hemaraj reported Total Assets of Baht 22,769 million, Total Liabilities of Baht 12,806 million and Total Shareholders Equity of Baht 9,963 million.  The Net Debt to Equity ratio was 1.07 to 1 with Cash and Deposits on Hand of Baht 2,130 million.