Thailand’s Land & Houses Q1 net profit up 28 pct

Land & Houses LH.BK(LH), Thailand’s biggest housing firm, reported a 28 percent rise in quarterly earnings on Tuesday helped by subsidiary earnings and lower expenses.

LH said in a statement it earned a net profit of 676.8 million baht ($20.99 million) in the three months ended March 31, up from 530 million baht a year earlier but down from 752 million baht in the fourth quarter.

The result beat an average forecast of 549 million baht from three analysts polled by Reuters.

Sales for the quarter fell 5.9 percent while average gross margin for the quarter was 29.6 percent, from 29.4 percent a year earlier, a Reuters calculation showed.

The company delayed transfers of ownership in the final month of the first quarter to the second quarter when the government’s property tax cuts took effect while the company raised house prices in the quarter, analysts said.

Profit contribution from affiliates including its 22 percent owned Quality Houses QH.BK and 43 percent owned LH Bank rose 105 million baht to 242 million baht while selling and administrative expenses fell 39.51 million baht to 394.51 million baht, it said in a statement.

Housing developers are raising house prices this year due to surging steel bar prices and rising building material prices.

Analysts said the government’s property stimulus packages, including cutting the transfer fee to 0.01 percent from one percent and a cut in specific business tax for developers to 0.1 percent from 3.3 percent would help reduce developer costs.

Eleven analysts polled by Reuters Estimates expect a 2008 net profit rise of 35 percent to 4.25 billion baht on revenue for the year of 22.38 billion baht, up 20 percent.

LH is 12.3 percent owned by the Government of Singapore Investment Corp. It specialises in prebuilt estates for middle income buyers and realises revenues within two weeks of a sale.

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John Davids John Davids
John Davids is a freelance writer for Thailand Real Estate & Property Guide and Thailand Real Estate Magazine
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