TRIS Rating Co., Ltd. has upgraded the company rating of Noble Development PLC (NOBLE) and the rating of NOBLE’s Bt1,000 million senior debentures (NOBL06NA) to “BBB+” from “BBB” with “stable” outlook. The ratings reflect NOBLE’s accepted brand in the medium- to high-end residential market, its
ability to maintain profit margins, and improving balance sheet. The ratings also take into consideration NOBLE’s pre-built single detached houses (SDH) inventories, and slowing demand for residential property
as a result of lower consumer confidence, rising interest rates, and construction costs.
The “stable” outlook reflects the expectation that NOBLE will be able to maintain its performance in
both the SDH and condominium markets. NOBLE is expected to sustain its favorable profit margins and acceptable cash flow protection. The company is anticipated to continue its conservative financing policy
for developing its property development projects in the medium term.
TRIS Rating reported that NOBLE is a medium-sized property developer, focusing on development
of SDH and condominium projects for middle- to high-income customers. The company’s competitive advantage is its recognized brand as a modern residential developer. NOBLE has continuously introduced unique designs for SDH and condominium projects to the market. The company’s operating performance in 2005 was satisfactory. Sales increased from Bt1,770 million in 2004 to Bt2,506 million in 2005 following
the transfer of the “Ora” condominium project to customers. For the first half of 2006, condominium
sales increased significantly from the success of its new condominium project “Remix” though the company’s
SDH sales slowed. Gross profit was maintained at 40% in 2005 and in the first half of 2006
while its debt to capitalization ratio improved from 46% in 2004 to 41% in 2005 and 38% as of June 2006. Looking forward, Noble’s leverage may increase slightly due to the company’s increasing exposure to condominium development.
TRIS Rating said, the current slowdown of the Thai economy and an uncertain political situation
are likely to unfavorably affect the residential property market as some homebuyers are likely to delay decisions to buy new houses. Competition in the housing market is expected to intensify in 2006-2007 as housing units continue to be offered to the market while demand has been moderating. Increasing construction material costs, together with rising interest rates, will put more pressure on developers’ margins. The tighter lending policies adopted by commercial banks will likely limit developers’ expansion plans, while rising interest rates will likely soften housing demand. -- End
Noble Development PLC (NOBLE)
Company Rating: Upgraded to “BBB+” from “BBB”
Issue Rating:
NOBL06NA: Bt1,000 million senior debentures due 2006 Upgraded to “BBB+” from “BBB”
Rating Outlook: Stable
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Copyright 2006, TRIS Rating Co., Ltd. All rights reserved. Any unauthorized use, disclosure, copying, republication, further transmission, dissemination, redistribution or storing for subsequent use for any purpose, in whole or in part, in any form or manner or by any means whatsoever, by any person, of the credit rating reports or information is prohibited. The credit rating is not a statement of fact or a recommendation to buy, sell or hold any debt instruments. It is an expression of opinion regarding credit risks for that instrument or particular company. The opinion expressed in the credit rating does not represent investment or other advice and should therefore not be construed as such. Any rating and information contained in any report written or published by TRIS Rating has been prepared without taking into account any recipient’s particular financial needs, circumstances, knowledge and objectives. Therefore, a recipient should assess the appropriateness of such information before making an investment decision based on this information. Information used for the rating has been obtained by TRIS Rating from the company and other sources believed to be reliable. Therefore, TRIS Rating does not guarantee the accuracy, adequacy, or completeness of any such information and will accept no liability for any loss or damage arising from any inaccuracy, inadequacy or incompleteness. Also, TRIS Rating is not responsible for any errors or omissions, the result obtained from, or any actions taken in reliance upon such information.
ability to maintain profit margins, and improving balance sheet. The ratings also take into consideration NOBLE’s pre-built single detached houses (SDH) inventories, and slowing demand for residential property
as a result of lower consumer confidence, rising interest rates, and construction costs.
The “stable” outlook reflects the expectation that NOBLE will be able to maintain its performance in
both the SDH and condominium markets. NOBLE is expected to sustain its favorable profit margins and acceptable cash flow protection. The company is anticipated to continue its conservative financing policy
for developing its property development projects in the medium term.
TRIS Rating reported that NOBLE is a medium-sized property developer, focusing on development
of SDH and condominium projects for middle- to high-income customers. The company’s competitive advantage is its recognized brand as a modern residential developer. NOBLE has continuously introduced unique designs for SDH and condominium projects to the market. The company’s operating performance in 2005 was satisfactory. Sales increased from Bt1,770 million in 2004 to Bt2,506 million in 2005 following
the transfer of the “Ora” condominium project to customers. For the first half of 2006, condominium
sales increased significantly from the success of its new condominium project “Remix” though the company’s
SDH sales slowed. Gross profit was maintained at 40% in 2005 and in the first half of 2006
while its debt to capitalization ratio improved from 46% in 2004 to 41% in 2005 and 38% as of June 2006. Looking forward, Noble’s leverage may increase slightly due to the company’s increasing exposure to condominium development.
TRIS Rating said, the current slowdown of the Thai economy and an uncertain political situation
are likely to unfavorably affect the residential property market as some homebuyers are likely to delay decisions to buy new houses. Competition in the housing market is expected to intensify in 2006-2007 as housing units continue to be offered to the market while demand has been moderating. Increasing construction material costs, together with rising interest rates, will put more pressure on developers’ margins. The tighter lending policies adopted by commercial banks will likely limit developers’ expansion plans, while rising interest rates will likely soften housing demand. -- End
Noble Development PLC (NOBLE)
Company Rating: Upgraded to “BBB+” from “BBB”
Issue Rating:
NOBL06NA: Bt1,000 million senior debentures due 2006 Upgraded to “BBB+” from “BBB”
Rating Outlook: Stable
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Copyright 2006, TRIS Rating Co., Ltd. All rights reserved. Any unauthorized use, disclosure, copying, republication, further transmission, dissemination, redistribution or storing for subsequent use for any purpose, in whole or in part, in any form or manner or by any means whatsoever, by any person, of the credit rating reports or information is prohibited. The credit rating is not a statement of fact or a recommendation to buy, sell or hold any debt instruments. It is an expression of opinion regarding credit risks for that instrument or particular company. The opinion expressed in the credit rating does not represent investment or other advice and should therefore not be construed as such. Any rating and information contained in any report written or published by TRIS Rating has been prepared without taking into account any recipient’s particular financial needs, circumstances, knowledge and objectives. Therefore, a recipient should assess the appropriateness of such information before making an investment decision based on this information. Information used for the rating has been obtained by TRIS Rating from the company and other sources believed to be reliable. Therefore, TRIS Rating does not guarantee the accuracy, adequacy, or completeness of any such information and will accept no liability for any loss or damage arising from any inaccuracy, inadequacy or incompleteness. Also, TRIS Rating is not responsible for any errors or omissions, the result obtained from, or any actions taken in reliance upon such information.