WHA Group posted strong 1H normalized earnings, continues its business expansion plan in response to EEC initiative

BackAug 14, 2018

Bangkok – WHA Corporation PCL., or WHA announced its strong 1H/2018 normalized earnings with the total revenue and share of profit of associates and joint-ventures at 5,470 million baht, and the net profit of 1,083 million baht, or 3% growth whereas the net profit from normal operation, excluding accounting implication on FX changes, was at 1,128 million baht or increased by 38%, due to the asset monetization to HREIT and the increase of utilities sales, together with the share of profit from the power business. Group CEO, “Jareeporn Jarukornsakul is confident with the 2H business plan, moreover WHA has been on process of negotiation with several large customers in both IE business and logistics properties business, responding to the EEC initiative and expect to reach the conclusion soon. The upcoming asset monetization to WHART and HREIT is expected to take place within this year-end.

Ms. Jareeporn Jarukornsakul, Chairman and Group CEO of WHA Corporation PLC., or WHA, the leader of fully integrated service of logistics facilities, industrial estates, utilities and power system, and digital platform, announced that the Company’s total revenue and share of profit of associates and joint-ventures in 1H/2018 had reached 5,470 million baht, increased by 14.6% from 4,773 million baht of the same period of last year, with the net profit of 1,083 million baht. However, the normalized net profit excluding the impact from the FX losses as a result of the Baht depreciation in Q2/2018 was reported at 1,128 million baht, increased by 38% from 816 million baht of the same period of last year. Such impact from FX losses was only accounting implication and did not affect the Company’s cash flow or its operating performance.

The key drivers of the operation growth of the first 6 months came from the asset monetization to Hemaraj Leasehold Real Estate Investment Trust (HREIT) with the asset value of 1,590 million baht at the beginning of the year, increasing sales volume of utilities service in line with the demand from the customers in the industrial estates, and the COD of the 5 SPP projects since Q2/2017 onwards, leading to the Company’s record of increased share of profit from power business of which the total installed capacity is at 510.5 MW, excluding the Solar Rooftop service which is under negotiation with 7-8 customers, accounting for approx. 5-6 MW, thereby consummating the expected year-end Solar Rooftop service to be approx. 10 MW.

In Q2/2018 the Company was affected by the depreciation of Thai baht against US dollar, which is only accounting implication not real operating performance, as well as the fewer land transfer compared to the same quarter last year. Thus, the Company recorded the total revenue and the share of profit of associates and joint-ventures of 2,023 million baht, decreased by 41% from the same quarter of last year, and the net profit decrease by 669 million baht or equivalent to 69% decrease. However, the normalized net profit excluding accounting implication on FX changes reduced by 379 million baht or equivalent to 42%.

Chairman and Group CEO of WHA Corporation PLC., or WHA also expressed her confidence in business outlook of 2H with tremendous growth especially from the industrial estates business and the logistics development business due to the industrial estate’s locations situated in the Eastern Economic Corridor (EEC) area, in accordance with the Company’s mission to promote targeted 10 industries development (S-curve) such as auto-part manufacturing, consumer product, as well as new industries supported by the government such as aerospace industry and next generation automotive industry.

According to the above mentioned factors, they have caused remarkable investment in Thailand, including WHA Group’s areas. At present, the Company has negotiated with 4-5 big customers who are interested in buying areas within the Company’s industrial estates. The concrete result of the deals will be concluded in 2H of this year with the confidence that the land sales in the industrial estates will meet the plan set at the beginning of the year.

In addition, there are negotiations of built-to-suit contracts for warehouse and distribution center with 2 large customers accounting for the area of 170,000 sq.m, leading to the continuous increase of the rental area of the warehouse and factory from both Built-to-Suit and ready-built up to 60,000 sq.m during the 1H of this year.

In Q4/2018, the Company has prepared to monetize its assets to WHA Premium Growth Real Estate Investment Trust (WHART) and Hemaraj Leasehold Estate Investment Trust (HREIT) which are expected to be executed as planned and the revenue will be recognized in fourth quarter of this year.