Operating results for the third quarter of 2008

P.30 / 2008

7 November 2008

President The Stock Exchange of Thailand

Re: Operating results for the third quarter of 2008

Preuksa Real Estate Public Company Limited would like to report on the Company and its subsidiaries' performance for the third quarter ended, 30 September 2008. Details are as follow:

Total Revenues
The Company and its subsidiaries' total revenues in the third quarter of 2008 were Baht 3,233.0 million, increased by 59.0%, compared to the same period of 2007, resulting from an increase in townhouse sale of Baht 646.2 million or a 57.8% growth, coupled with an increase in single- detached house sale of Baht 499.6 million or a 55.9% growth.

For the nine-month period of 2008, total revenues were Baht 8,750.5 million, increased by 42.1%, compared to the same period of 2007, resulting from an increase in townhouse sale of Baht 1,635.8 million or a 47.0% growth, coupled with an increase in single-detached house sale of Baht 837.9 million or a 31.9% growth.

The significant revenue growth reflected the implementation of the correct strategy, that is, continuous launching projects in right locations since the late 2007, housing model development with appropriate selling prices, hence a successful real estate sale.

Cost of sale of real estate
Cost of sale of real estate for the third quarter of 2008 was Baht 2,063.1 million, representing 64.2% of revenue from sale of real estate, a 3.0% decrease from that of the previous year at 67.2% of revenue from sale of real estate.

For the nine-month period of 2008, cost of sale of real estate represented 64.0% of revenue from sale of real estate, a 2.4% decrease from that of the previous year of which representing 66.4% of revenue from sale of real estate.

The better gross profit margin was due to the implementation of the right pricing strategy for new housing projects together with efficient cost management.

Selling and administrative expenses
Selling and administrative expenses in the third quarter of 2008 were Baht 450.75 million, expanded by Baht 36.4 million or a 8.8% growth whilst revenue increased by 59.0%, in comparison with those of the previous year, as a result of significant decreases in business tax and transfer fees of Baht 78.5 million or a 94.6% decrease as a result of government's tax incentives to help stimulate property sector by reducing the special business tax and the transfer fee to 0.11% and 0.01%, respectively, which became effective on 29 March 2008. Marketing and advertising expenses however increased by Baht 67.4 million or a 56.1% increase, other selling and administrative expenses increased by Baht 24.5 million or a 22.8% growth, whereas personnel related expenses increased by Baht 21.4 million or a 22.4% growth.

For the nine-month period of 2008, selling and administrative expenses increased by Baht 196.3 million, or a 18.6% growth, in comparison with those of the previous year, as a result of significant decreases in business tax and transfer fees of Baht 154.9 million or a 62.2% decrease as per aforementioned reasons. Nevertheless, marketing and advertising expenses increased by Baht 209.7 million or a 77.4% increase as a result of brand building and marketing activities to stimulate presale, which increased by 51.7%, other selling and administrative expenses increased by Baht 75.8 million or a 30.5% growth, whereas personnel related expenses increased by Baht 59.9 million or a 22.5% growth in order to support expansions of the Company's business.

Selling and administrative expenses for the nine-month period of 2008 representing 14.3% of total revenue, decreased from those of the previous year of 17.2% of total revenue as a result of business expansion and benefits from the aforementioned government's tax incentives since the end of the third quarter of 2008.

Income tax
Income tax for the nine-month period of 2008 was Baht 396.8 million representing 4.5% of the total revenue, expanded by 101.8% from that of the previous year of Baht 196.6 million or 3.2% of the total revenue, implying that Earning Before Tax for the period ended, 30 September 2008, was Baht 1,902.4 million increased by Baht 901.8 million or a 90.1% growth from the same period of last year. The Company however paid a higher income tax rate as a result of lower revenue from the Board Of Investment (BOI)-promoted business. Such trend would continue in the next quarter periods as the Company has shifted to expand its business in higher housing products due to the restriction of BOI-housing construction cost

Net profit
In summary, the Company and its subsidiaries' net profit for the third quarter of 2008 was Baht 558.2 million, increased by Baht 369.5 million or a 195.8% growth, compared to the same period of the previous year.

For the nine-month period of 2008, the Company and its subsidiaries' net profit was Baht 1,505.6 million, increased by Baht 701.6 million or a 87.3% growth, compared to the same period of the previous year.

Please be informed accordingly.

 

Sincerely yours,

 

(Mr.Somboon Wasinchutchawal)
Chief Financial Officer

 

Investor Relations Department: monathy@ps.co.th,
Tel. 0 2298 0101 ext.863