The company generated total presales for the quarter of 3.4 billion Baht, in line with guidance, despite two project launches being shifted from the second to third quarter. The company ended the quarter with a big backlog of 38.5 billion Baht, due to transfer over the next 3 years, up 12.3% from the same quarter a year earlier.
Commenting on the presales, Mr. Ted Thirapatana, Chief Business Development Officer for Ananda, stated, "We have achieved our quarterly presales target in the second quarter with no new projects launching in the quarter. In the first half of the year, we have already reached 39% of our annual presales target and we still have 10 planned projects to be launched this year. We have exceeded our expectations and demonstrated that demand exists for units at all price ranges provided the units are good value for money, quality units near mass transit stations."
2nd quarter revenues from sales of real estate were 2.5 billion Baht, 24% higher than the guidance issued by the company at the beginning of the quarter and represents a 111% increase over the same quarter a year ago. This drove the company's net profits to 210 million Baht for the quarter, an increase of 191% year on year. The company's net margin was 7% for the quarter, an improvement from the 5% in the same quarter last year. The company still maintains its guidance for total annual transfer for the year between 15 - 16 billion Baht.
Commenting on the results Ms. Muntana Au-kitkajorn, Chief Financial Officer for Ananda Development said, "The revenue results exceeded our expectations. In particular, Ideo Q Ratchathewi completed construction in March 2016 and continued to transfer at a faster rate than we anticipated. Profits were also better than expected as the company was successful in continuing to control costs in the quarter, with selling, general and administration costs to revenue falling to 20% in the quarter from 29% in the same quarter a year ago despite the company's rapid growth."
Mr Chanond Ruangkritya, CEO of Ananda, said, "We are delighted to have achieved such strong revenue results in the quarter and in particular that our net profits increased almost 200% from the same quarter last year. 2016 is the beginning of an exciting period for Ananda as we enter what we refer to as our "Harvest Period". We are finally about to see the investment made after the IPO come through as transfers when we expect to see transfers grow much more rapidly from 2016 onwards as buildings already launched and sold begin to transfer. We have five condominium buildings finishing construction and beginning to transfer in 2016."
He added, "We have maintained our operational discipline and brought down our percentage of selling, general and administration costs to revenue compared to last year. We also maintained financial discipline and achieved this growth without adding risk and maintained our net interest bearing debt to equity at only 0.7:1."
He continued, "Our cash flow remains strong and we have maintained a large cash balance with over 2.7 billion Baht in cash at the end of the quarter. We have continued to have strong support from our banks and have multiple options in place to fund the cash needs of the company through the year depending on how the situation evolves. In May 2016, we issued a new equity treated non-convertible unsecured perpetual security instrument of 1 billion Baht, supporting the growth and working capital for the business. Our financial discipline has been recognized by TRIS Ratings upgrading our corporate credit rating from "BBB-" with positive outlook to "BBB" with stable outlook and rating the perpetual issuance at "BB+" with stable outlook."
As such, the Board approved an interim dividend in the amount of 4 satang, an increase of 25% from a year earlier and extends the company's record of increasing the dividend every year since the IPO."
He added, "Ananda is the market leader in Bangkok mass transit living and through the constant innovations in both building design and every other aspect of real estate development we aim to maintain our leadership in the condominium market. We place innovation as the heart of our competitive strategy and as such have recently moved into a new state of the art office at FYI Center. The office is a collaboration between Ananda, Samsung and Cisco and other suppliers and incorporates technologies never before sold outside of North America, meaning we believe it is truly the smartest office in Asia. The new office allows us to begin to execute on what we call our "Ananda 2.0" strategy, which includes using technology to allow us to triple worker productivity over the next 3 years while tripling company revenues.
He continued, "Our partnership with Samsung and Cisco to deploy industry leading Smart Office technology is further evidence of our commitment to leading innovation. We believe this is important for improving creativity, innovation, collaboration and maximizing productivity. We will be working together to learn more about how technology can be used to improve the lives of our people. This is the DNA of Ananda, to innovate and improve."