Last year was a time to forget for Thai developers as the combined net profits of the country’s listed property companies declined by nearly 4 per cent according to local media. Many companies had to increase marketing budgets in an attempt to improve sales in the 4th quarter and this cut into profits.
L.P.N. Development earned total revenue of THB 14.65 billion in 2016. This was down over 12 per cent from its 2015 revenue of THB 16.67 billion. Net profit from L.P.N. dropped by almost 10 per cent from THB 2.4 billion in 2015 to THB 2.17 billion last year, reports local media.
The declining performance last year was due to lower demand in the second half, says L.P.N. Development Managing Director Opas Sripayak. Commercial banks made it more difficult for low-income buyers to obtain mortgage approvals and this has contributed to the declining market. “This year we are shifting our business focus to the middle- and upper-income markets to drive our business growth,” says Opas.
Pruksa is another developer that saw its revenue tumble. The company announced its 2016 net profit to be THB 5.94 billion, a decrease of 22.65 per cent from 2015. Its revenue declined 7.4 per cent in 2016 bringing in only THB 46.92 billion.
Despite the decline in revenue and net profit, there was some good news for Pruska. The company’s presales grew by 4.8 per cent up from THB 42.38 billion it brought in 2 years ago to THB 44.41 billion last year. Pruska earned its highest presales sum since the company went into business 23 years ago, says Pruksa Chief Executive Officer Thongma Vijitpongpun to the Nation.
There is hope that the overall property market in 2017 will improve from 2016’s dismal showing and Pruska is forecasting growth of about 5 per cent. This optimism has seen Pruksa target presale growth of 19 per cent to THB 52.9 billion for this year.
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