RML continues to build resilience to weather Covid-19 impact by accelerating plans to boost revenue and liquidity, strengthening cash flow
Bangkok, 18 May 2020 – Raimon Land Public Company Limited (“the Company”), Thailand’s leading developer of luxury real estate, announced plans to further boost revenue and strengthen its financial liquidity to weather Covid-19 impacts. Two projects were successfully sold out, the sales went better than expectations. This includes accelerating presales worth a total value of THB 599 million, managing the cost of sales and services, and shoring up the Company’s cash position for future investment opportunities. For 1Q 2020, the Company reported a loss of THB 139 million on THB 424 million revenues.
Mr Lionel Lee, Chief Executive Officer of Raimon Land, said: “The outbreak of Covid-19 has dampened the purchasing decision amongst Thai and international customers. Particularly, the travel restrictions in place have affected the ability of our international customers to visit Thailand and impacted asset transfers for our projects. Nonetheless, we are progressing with our plans to building resilience in our business by further strengthening our cash position through proactive cost management and targeted sales strategies. I’m confident that our approach will put us in a good position to emerge stronger through this crisis.”
For 1Q 2020, the Company has successfully closed two projects – Mews Yen Akat, and The Lofts Asoke, as part of its targeted sales strategy on existing inventories. This respond was considered successful beyond expectations. Together with sales from other projects, this has enabled the Company to book presales worth a total of THB 599 million in this quarter, successfully boosting and strengthening the Company’s cash position.
The Company has also planned and set aside cash flow to redeem its debenture amount of THB 712 million from bondholders, which will be called in June 2020. In the midst of the epidemic of the Covid-19 virus, Raimon land is a real estate developer that maintains relatively low debt with balanced financial liquidity. To further stimulate demand and boost sales volumes, the Company is offering promotions through its O2O (Online to Offline) strategy and online channel, which enables customers to view the luxury residential units in a virtual environment, before visiting the projects of their choice. The O2O channel will allow the Company to continue to engage our customers, even during government lock-downs and travel restrictions for both our Thai and international customers.
In view of the Covid-19 restrictions and impact across the travel and hospitality industries, the Company has also postponed the launch of “Hotel KITCH”, originally scheduled in April 2020, to the fourth quarter of this year. However, the Company remains optimistic in the hospitality sector in the medium to long-term, especially when Thailand and the world recovers from Covid-19. The Company will continue to look for high-value opportunities to invest and expand its hotel business, and continue to build resilience through diversification from its recurring income portfolio.
For 1Q 2020, the company reported total revenue of THB 424 million, which is a decrease of THB 1,039.0 million, or 71%, from the same period last year. THB 366 million, or 86% of the total revenue was from transfer revenue of five residential projects. The decrease in revenue in this quarter was largely due to Covid-19 travel restrictions, which prevented international customers from travelling into Thailand to complete the unit transfer process, including the Lofts Silom project that has 37% of international customers in its book. Apart from that, the F&B business contributed THB 8 million revenues, THB 18 million from rental, services and project management business, and THB 31 million from others. The Company had a consolidated net loss of THB 139 million , which translates to a net loss of 0.03 per share.
As of 31 March 2020, the Company has a backlog worth a total value of THB 7,881 million from eight projects, including 30% from Tait 12; 26% from The Lofts Silom; 7% from The Estelle Phrom Phong; 2% from The Lofts Ratchathewi; and 3% from other projects.