STILL TOUGH TIMES FOR BIG FIRMS

       Construction firms listed on the Stock Exchange of Thailand continue to report difficult business conditions extending into the second half despite some of them reporting year-on-year increases in their first-half net profit.
       Italian-Thai Development achieved first-half revenue of Bt21.16 billion, down 3.42 per cent year on year. However, the company returned to the black, from a net loss of Bt439 million in last year's first half to a net profit of Bt46.53 million in this year's first half.
       The company said the profit performance came from reasons other than its business operations. It gained a Bt503 million from buying back convertible bonds, Bt142 million on exchange rates, because of the baht's appreciation, and "other income" of Bt445 million, mostly from insurance claims and claims on some project owners. Finally, it received interest income of Bt126 million.
       Ch Karnchang reported revenue growth of 46 per cent, from Bt6.69 billion in last year's first half to Bt9.77 billion in this year's first half. However, its net profit fell 10.98 per cent, from Bt346 million to Bt308 million.
       By way of explanation, CEO Plew Trivisvavet said that in last year's second quarter, Ch Karnchang gained Bt278.6 million from the sale of investment in an associated company and Bt114 million from exchange rates. In this year's first half, the company lost Bt174 million from investments in associated companies, considerably more than the loss in the same period last year of Bt99.6 million from investment in associated companies.
       Ch Karnchang's costs of finance have also increased because of bond issues raising Bt3.9 billion this year, Plew said.
       Sino-Thai Engineering and Construction achieved first-half revenue of Bt6.13 billion, down 13.78 per cent year on year. However, the company's net profit was Bt92 million, up 41.53 per cent.
       Director Woraphant Chontong told the SET that the profit increase was due to a substantial fall in the company's financial costs. These costs fell by Bt21.37 million in the second quarter and Bt35.92 million in the first half, year on year.
       Thai Contractors Association president Polpat Karnasuta, who is also president of construction firm Nawarat Pattanakarn, earlier said contractors were continuing to face tough times, because of delays in starting the government's mega-projects.
       Construction firm Thai Obayashi has also warned its revenue may drop 30 per cent to Bt6 billion this year, because the number of new projects is lower than last year, due to the economic downturn.
       President Sompong Chintawongvanich said demand for construction from both the government and the private sector had fallen and would not recover until construction began on the government's mega-projects next year.