TRIS Rating Co., Ltd. has affirmed the company rating of Sansiri PLC (SIRI) at "BBB" with "stable" rating outlook. The rating reflects the company's leading position and track record in the condominium market, increasing contribution from its low-rise residential sales, recurring income from its property management business and an improved financial position following the sale of the Sofitel Silom Bangkok Hotel (the Sofitel Silom). The rating also takes into consideration the slowing pace of residential demand that is the result of both decreasing consumer confidence in the nation's economic situation and higher interest rates. In addition, increasing construction material costs and higher fuel prices are expected to put more pressure on developers' margins.
While the "stable" outlook reflects the expectation that, SIRI's plans for future residential developments will be moderate, in response to the changing economic situation. Tighter cost controls are expected to be implemented to cope with increasing operating and financing expenses and softer demand in the residential market. SIRI is expected to be able to complete construction of condominiums in line with its plan. SIRI is also expected to maintain sufficient liquidity to cover confidence-sensitive short-term borrowings.
TRIS Rating reported that SIRI's performance in 2004 was below expectations. Though the company's residential sales increased from Bt2,858 million in 2003 to Bt5,691 million in 2004, its new condominium presales in 2004 were 61% lower than in 2003. Aggressive expansion in single detached house (SDH) projects during 2002-2004 has resulted in growing SDH sales and increased inventories in 2004. Without expansion, SIRI's existing SDH stock of approximately 500 units should be sufficient for two years of sales. The divestment of the Sofitel Silom for Bt1,099 million, improved SIRI's liquidity and leverage, with SIRI's total interest bearing debt decreasing from Bt10,098 in March 2005 to Bt9,272 million in June 2005. -- End
Sansiri PLC (SIRI) Company Rating: Affirmed at "BBB" Rating Outlook: Stable
While the "stable" outlook reflects the expectation that, SIRI's plans for future residential developments will be moderate, in response to the changing economic situation. Tighter cost controls are expected to be implemented to cope with increasing operating and financing expenses and softer demand in the residential market. SIRI is expected to be able to complete construction of condominiums in line with its plan. SIRI is also expected to maintain sufficient liquidity to cover confidence-sensitive short-term borrowings.
TRIS Rating reported that SIRI's performance in 2004 was below expectations. Though the company's residential sales increased from Bt2,858 million in 2003 to Bt5,691 million in 2004, its new condominium presales in 2004 were 61% lower than in 2003. Aggressive expansion in single detached house (SDH) projects during 2002-2004 has resulted in growing SDH sales and increased inventories in 2004. Without expansion, SIRI's existing SDH stock of approximately 500 units should be sufficient for two years of sales. The divestment of the Sofitel Silom for Bt1,099 million, improved SIRI's liquidity and leverage, with SIRI's total interest bearing debt decreasing from Bt10,098 in March 2005 to Bt9,272 million in June 2005. -- End
Sansiri PLC (SIRI) Company Rating: Affirmed at "BBB" Rating Outlook: Stable