Bangkok – WHA Corporation PCL (WHA Group) reports its steady normalized net profit in Q3/2020 with strong financial positioning as it expects to pay interim dividends for the nine-month period at THB 0.0367 per share. With upcoming asset divestiture transaction into WHART and HREIT worth approximately THB 4.6 Billion, it signals the Q4 performance will see a significant recovery. Ms. Jareeporn Jarukornsakul, Chairman and Group CEO of WHA Corporation PCL, notes that demand for built-to-suit warehouses continues to be strong and industrial development clients are still waiting for relaxed government measures. For investment in Vietnam, the company will move forward with its development plans and will open new zone in 2021 while utilities and power business will improve, as demand for water and electricity increases.
Ms. Jareeporn Jarukornsakul, Chairman and Group CEO, WHA Corporation Public Company Limited (WHA Group), reveals about the third quarter performance ending 30 September 2020 that the company’s revenue and share of profits from investment in associates and joint ventures combined THB 1,611.4 Million with a net profit of THB 428.6 Million. Considering the normalized performance, its total revenue and share of profits from operations stood at THB 1,609.0 Million and net operating profit was worth THB 440.7 Million, declining 28.0% and 3.6%, respectively, from the same period last year. For the nine-month period, the company recorded revenue and share of profits at total THB 4,855.9 Million and net profit THB 1,069.9 Million. When considering the normalized performance, its total revenue and share of profits from operations was THB 4,893.4 Million and its net operating profit THB 1,155.3 Million, lowering 26.4% and 25.6% respectively year-on-year.
Contributing to the factors were the delayed industrial land transfers due to the country’s unsettled lockdown and travel restriction measures, the declined share of profits from Gheco-One Power Plant and the increased depreciation from utility projects. However, the company is still confident in its strong financial positioning, and performance in Q4, as a result, the board of directors had a resolution to pay an interim dividend on the 9-month performance at 0.0367 THB per share. The announcement of XD will be on 26 November 2020, and the dividend payment is due on 9 December 2020.
Specifically, Logistics business continued to grow and its total revenue in the third quarter was THB 302.0 Million, similar to the previous quarter. Presently, the company is in active discussion with potential customers from E-commerce, food, and logistics businesses to rent out more than 200,000 square meters of warehouses and distribution center. With upcoming projects, total rental warehouse space under owned and managed will exceed 2.5 million square meters by the end of this year.
For the asset divestiture into REIT this year, the plan is on track and the company shall be able to realize revenue from sale transaction to WHART and HREIT with total assets worth THB 4.6 Billion by this December.
For Industrial Estate Development, the company realized revenue from land transfer at total THB 112.0 Million in the third quarter, a drop from the previous quarter, as the process of land transfer and new land sales were delayed due to the country’s lockdown and travel restrictions. However, during the third quarter, the company generated THB 307.9 Million of revenue from the right of way, and this made gross profit from the industrial estate business increased THB 94.4 Million from the second quarter.
In addition, the industrial estate business in Vietnam, WHA Industrial Zone 1 – Nghe An, is performing well. Recently, Goertek Precision Industry Vietnam Co., Ltd., specialized micro-electromechanical systems (MEMS) manufacturer, has purchased land area of 40.48 ha (253 rai) from the company for their factory complex to manufacture mobile phones’ electronic components, such as air pods. As a result, the company expects the land sale volume in Vietnam this year to be higher than projection. In 2021, it plans to expand industrial land in Phase 1’s Zones 2 and 3 to accommodate more demand from investors.
For the Utilities business, the company’s total revenue from utilities service was THB 493.1 Million in the third quarter as total water sales improved with new sales volume in Vietnam, while the sales in Thailand remained at the same level as previous quarter. The company expects water sales in the fourth quarter to increase as utilities customers resume their normal operation with some new expansion, especially petrochemical operators, who are the company’s main target customers.
Moreover, WHA Group has expanded portfolio of its water products and services continuously. Its biggest water reclamation plant, with capacity of 25,000 cubic meters per day, is due to open for commercial operation in December. Besides, the company has already signed a contract for Demineralized Water phase 2 with GPSC to produce 4,000 cubic meters of demineralized water per day. The project will also start commercialization by December this year.
For the power business, the company realized a share of normalized operating profits from investments in associated and joint ventures, excluding the accounting loss from foreign exchange at THB 240.6 Million in the third quarter. The decline of revenue was a result of 10% corporate tax payment since the end of last year and the reduction of availability payment based on electricity buy-sale agreement.
Meanwhile, the company generated substantial revenue and share of profits from the group of small power plants and Chonburi Clean Energy waste-to-energy power plant. Furthermore, the COD of 7 additional megawatts of solar rooftop projects made the total electricity-generating capacity from solar business reach 27 MW at the end of the third quarter. It also anticipates the electricity-generating capacity from solar business to achieve 42 MW by year-end, which will generate annual revenue of approximately THB 150 Million.
Digital business, as COVID-19 accelerated digital transformation and technology adoption, businesses have put more attention on quality digital infrastructure and the use of digital technology to improve their productivity. Currently, the company is able to offer a full range of digital services covering data centers, FTTx network, Cloud and Managed Services as well as various solutions including 5G in the future to serve both Logistics and Industrial Estate customers.
Lastly, another key milestone of WHA Group’s success includes the grand opening of WHA Tower, its new headquarters that has won praise and admiration during the Asia Pacific Property Awards for the “Commercial High Rise Architecture Thailand” Award. The dedicated prestige office tower’s architectural design was inspired by “Chin,” an ancient Chinese symbol representing wealth and prosperity. WHA Tower located on Theparat Road KM 7 (Old Bang Na-Trat Road) in connection with inner Bangkok and EEC provinces. The construction and decoration process shall complete in the first quarter of 2021. WHA Tower is a 25-storey A-Grade office building with total usable space of 52,000 sq m. Its unique design for working and common space will be able to perfectly accommodate the needs of those whose work requires creativity, innovation and collaboration, making it suitable for both big corporations, international companies, small and medium enterprises, and startups.