Message from the chairman
In 2018, despite of an improvement in Thai economic growth from previous years but many sectors had been affected from the turbulent world economy. The notable household debt of 80% posted a problem of high non-performing loan resulting in a tight loan policy imposed by the Bank of Thailand, among the bottom end of the market in particular. This made property developer in that market diverted their target to middle and upper market making up more supply and competition in the middle market. The Company realized this problem with a policy to speed up sale at ISSI Condominium Suksawat even though that effort inevitably resulted in a lower profit.
The Company had total revenue in 2018 of Baht 3,188 million, an increase from that of 2017 by Baht 870 million or 38%. Sources of revenue were Baht 2,067 million property development for sale, Baht 699 million hotel operation, Baht 123 million rental and services and Baht 296 million other revenue of which Baht 187 million came from the profit gained from sale of phase 1 Baba Beach Club Hua Hin – Cha Am to Sripanwa Real Estate Investment Trust which had increased total assets of the trust to Baht 4,100 million. The Company has Baht 125 million profit in 2018.
Except for ISSI Condo Suksawat project which has 10 units left for sale, other projects of the Company continue their developments. The Company has sales waiting for title transfer of some Baht 1,100 million. Show suite and clubhouse of Baan Issara Bangna and Issara Residence Rama 9 are completed and ready for reception. The construction of phase 1 Issara Chiangmai has been completed. The Company is developing Baht 200 million additional pool villas at Sripanwa and a convention hall with 20 pool suites worth around Baht 1,000 million to enable Sripanwa to host big events in the future. The development of phase 1 Baba Beach Club Hua Hin Cha Am has been completed and operation well beyond expectation and was sold to Sripanwa REIT as mentioned above. Currently, the Company is developing Baht 1,500 million additional Baba Villa including 12-storey hotel building with 47 rooms, banquet hall and others. The construction of around Baht 700 million Baba Beach club Phuket/Phang Nga is expected to be completed in 2019.
In addition, the Company is developing around Baht 1,100 million holiday club project at Thew Talay Estate and develop the 4 rai land plot in front of the project by Petchkasem road into a gas station and retail shops to be an amenity for residents of Thew Talay and general customers. The Company has acquired a land plot on Chan road for the development of high end residential condominium worth around Baht 2,000 million which is expected to be completed in 2021.
The hotel operation in 2018 went well but its operating results was not quite satisfactory. Even though the year was a good year for Thai tourism but it must have been noted that incident like zero dollar tour and the boat capsize at Phuket caused the drastic decrease of Chinese tourist in the second half of the year which affect the sale at Sripanwa hotel and the Issara Chiangmai. For the project at Hai Nan, China the Sripanwa Hai Nan hotel is under construction which is expected to be completed and operational in 2020.
The injection of Sripanwa phase 1, phase 2 and Baba Beach Club Hua Hin into Sripanwa Hospitality Real Estate Investment Trust was a big lot sale or wholesale with a good result. That was the use of financial instrument to the best advantage for the Company’s assets resulting in a good profit in addition to normal sales in property development. This will be the Company’s continued policy to sell developed projects to the trust or lease those projects to the trust on a long-term basis. The Holiday Club project is a new type of sale which does not have much competition and should yield good profit. The Company can then use its hotel operation experience and knowledge to its advantage.
The year 2019 is the year that we have to work cautiously hard and we will try our best. My sincere gratitude is extended to shareholders, alliances and all of our staff.
Mrs. Srivara Issara
Charn Issara Development Public Co., Ltd.