WHA Group reported THB 197 million Normal Profit, a 26% Increase, despite Covid 19 turmoil

WHA Corporation Public Company Limited (WHA Group), announced its Q1/2020 performance with Revenue and Share of Profits from Investment of THB 1,278 million, Net Profit of THB 99 million, and Normalized Net Profit of THB 197 million, surging 26% from the same period last year.  Group CEO “Jareeporn Jarukornsakul” is confident WHA’s 4 core businesses will resume strongly in the second half of 2020 as the company’s fundamentals remain strong and customers continue showing strong interests in the company’s properties and services.  Moreover, Asset Monetization to WHART and HREIT was already set to launch in Q4.

Ms. Jareeporn Jarukornsakul, Chairman of the Board of Directors and Group CEO of WHA Corporation Pcl (WHA Group), revealed that in Q1/2020 the company had a Revenue and Share of Profits from Investment in Associates and Joint Venture of THB 1,278 million, a Net Profit of THB 99 million, and a Normalized Net Profit of THB 197 million, a 26% increase year-on-year, if excluding Unrealized Gain on FX and Recognition of Deferred Revenue Item (which happened in 2015 but recognized in 2019 per TFRS standard) from last year’s figure.

“Our Logistics and Rental Property Business expanded strongly in Q1/2020.  The company’s Rental Revenue improved 27% to THB 286 million.  Unsurprisingly, E-Commerce and Consumers have been performing very well during the pandemic resulting in strong demand for premium warehouses, distribution centers, and factories in key strategic locations, which, exactly, are our area of expertise.  We expect to see 250,000 sqm of net rent this year, which will expand our total owned and managed portfolio to 2.6 million sqm,” said, Ms Jareeporn.

For the Industrial Estate Business, the land transfer faced a delay due to a travelling restriction measure in response to COVID-19.

Nonetheless, the Company was able to realize a revenue of THB 245 million from industrial land transfer. “We expect to see strong recovery in industrial land sale in the second half, despite this short-term interruption in Q1.  We still received a great deal of inquiries and strong interests for our industrial estates from number of potential customers, especially from China, Japan and USA as a result of production relocation from China to Southeast Asian countries.  We expect to see swift recovery in Chinese segment, with a number of stimulus programs announced by the Chinese government.  The fundamental of Thailand as regional production hub remains strong and the qualities our industrial estates provide can fully support the needs of these world-class customers,” Ms Jareeporn explained.

The Utilities Business reported THB 534 million of Revenue in Q1/2020, a slight 5% decrease in overall Revenue and Profit Share in Q1/2020 following the government’s request for cooperation from operators in industrial estates to reduce their water usage by 10% to help alleviate the drought situation in Thailand.  On the other hand, the company is expanding its reclaimed water capacity from 10,000 to 30,200 cubic meters per day which will not increase the company’s profit, but also increase water source stability for the future.  In Vietnam, the increase of water sale and the expansion of pipeline network of Duang River Water Treatment Project were growing slower than planned due to tight COVID-19 mitigation measures by the government.  Despite the slowdown in Sales, the company’s profit margin from utilities business remain high and the company expect to see improvement in both countries as the draught and COVID-19 situation start to alleviate.

For Power Business, the company had a normalized share of profits from investment in associates and joint ventures, exclusive of unrealized impact from FX, of THB 245 million, a 56% growth from previous year.  The increase was the result of the company’s continued capacity expansion plan during the past few years in both conventional and alternative segments.  Last year, the company added another 2 power plants, Gulf NLL 2 and Chonburi Clean Energy (CCE), to its portfolio, which brought the total equity MW in operation to 570 MW.  In this Q1/2020, performance of our largest power project, GHECO-1 also improved as no maintenance in the period.

Lastly, Digital Infrastructure Business, the latest business hub of the group, also continued to expand, as more and more of the company’s industrial customers start using technologies to manage their businesses.  Currently, the company is in the process to expand its fiber optic network (Fttx) to cover all 10 industrial estates in Thailand which will increase digital capabilities to accommodate the growing needs of existing and new customers.        

As for Asset Monetization Program, the company has been also in the process to monetize its assets to WHA Premium Growth Real Estate Investment Trust (WHART) and Hemaraj Leasehold Real Estate Investment Trust (HREIT).  The company expects the process to complete and will be able to recognize revenue from asset sales in Q4/2020.  WHART and HREIT are No1 and No3 largest industrial REIT in the market.

On 27 April 2020, the Board of Directors of WHA, with confidence in the company’s financials and to reward the company’s investors, approved the second interim dividend of THB 0.0535 per share, together with the previous interim dividend in December 2019, making total interim dividend for 2019 financial performance of THB 0.1350 per share.

“We are optimistic about our 4 main business and are confident in our financial”, said Ms Jareeporn. “Our businesses should resume to normal in the second half and with asset monetization to WHART and HREIT in Q4, we expect another excellent performance for the last 6 months of this year.”