Somboon Advance Technology Plc (SAT) will review this year’s revenue forecast of 7.3 billion baht to take into account the Japanese disasters and Middle East riots.
SAT is the second-largest auto-parts maker on the Stock Exchange of Thailand (SET).
President Verayut Kitaphanich said it remained too early to determine the full effects from Japan’s earthquake and tsunami last Friday and nuclear power plant failures this week. However, some impact has already been felt.
SAT is the exclusive supplier of front and rear coil springs for the Nissan March, Thailand’s first eco-car. Mr Verayut said half of this year’s planned production of 80,000 to 100,000 units was scheduled to be shipped to Japan, while launches of new eco-car models may be affected in the short term.
As well, the Middle East is a major export market for Thai-made vehicles, he said.
“The unfavourable situations in Japan and the Middle East could trim Thailand’s chances of hitting the two-million-unit vehicle production mark this year, although we’re positive the original target of 1.8 million units will be met,” Mr Verayut said during a briefing at the SET.
“The risks of doing business are escalating, and we must review our second-half performance outlook. As yet, we cannot say with certainty that our full-year target growth of 12-14% will be achieved.”
SAT is studying the possibility of sourcing special-grade steel from India in addition to Japan, the latter of which accounts for two-thirds of the steel content in the company’s products.
Its customers, led by Mitsubishi, Toyota and Isuzu, have not approved the use of Thai-made steel.
The existing inventory can meet SAT’s production needs for 45-60 days.
Worapote Chutchaikulsiri, SAT’s vice-president for finance and accounting, said the company would spend 2.05 billion baht this year to expand capacity, out of a three-year, 3.5-billion-baht investment plan that began in 2010.
Average annual sales growth is forecast at 12-15% from 2011-13, outpacing 10% annual growth in vehicle output estimated for the same period.
SAT’s revenue from Kubota tractors alone is expected to increase by 125% to 900 million baht this year as the Japanese maker ramps up its local production.
SAT achieved full-year revenue of 6.26 billion baht last year, up by 46% from 2009, with a net profit of 771 million baht, up by 146%, thanks to impressive sales growth on both the domestic and the export fronts.
The company is set to supply disc and drum brakes for Honda’s new eco-car scheduled to launch later this month, as well as for Mitsubishi and Suzuki models debuting next year.
SAT shares closed yesterday on the SET at 21 baht, down 1.10 baht, in trade worth 44.9 million baht. (Bangkok Post)