GOOD SHAPE DESPITE DEBT TO EQUITY

       The debt-to-equity ratio of listed property developers in the second quarter was higher than in the first, because some of them have high presales backlogs, which will not improve their liquidity until the properties are completed and delivered to customers.
       Others have high levels of liquidity because they shouldered debts by buying undeveloped land, then delayed capitalising on that investment by putting residential projects on hold.
       However, the debt-to-equity ratios of the top five property firms continue to be less than 1. They include Preuksa Real Estate, SC Asset, LPN Development, Land & Houses (L&H) and Property Perfect. (See graphic)
       Preuksa Real Estate director and chief operating office Prasert Taedullayasatit said his company's second-quarter debt-to-equity ratio was higher than in the first quarter because the company had a high presales backlog that had to be booked as debt.
       If only that debt that incurs interest payments to banks or bondholders is taken into account, the company's debt-to-equity ratio is only 0.1. That means Preuksa's liquidity this year is high enough to develop residential projects, and it will delay a planned Bt2.5-billion debenture issue until next year, he said.
       Meanwhile, L&H senior executive vice president Adisorn Thananun-narapool said although his company's debt-to-equity ratio had risen, when its debt-to-net-capital ratio was calculated at the end of second quarter, it was 0.54 - lower than at the end of last year, when the debt-to-net capital ratio was 0.55.
       That means L&H's cash flow continues to be healthy. At the end of the second quarter, it had liquidity of Bt2.3 billion, up fro Bt1.07 billion at the end of last year.
       Asian Property Development (APD) chief executive Anuphong Assavabhokhin said his company's net debt-to-equity rose slightly in the second quarter, in line with an increase in the company's net debt, from Bt5.2 billion in the first quarter to Bt5.9 billion in the second.
       To reduce the company's interest-rate risk, most of its debt (73 per cent in the second quarter) was in bonds with a fixed long-term rate. Of APD's outstanding bonds, one lot worth Bt375 million matured last month, while another Bt1.5 billion worth will mature next July.
       In addition, the company recently issued Bt1-billion worth of threeyear unsubordinated and unsecured debentures with a 5-per-cent interest via private placement. This will reduce the company's interest costs in the second half of the year, Anuphong said.
       Sansiri president Srettha Thavisin said his company's debt-to-equity ratio increased from 1.2 in the first quarter to 1.7 in the second, because the company issued Bt1 billion worth of debentures in the second quarter.
       However, the ratio will fall back to 1.2 this year after the company pays back some loans and if its financial performance goes according to plan. Sansiri expects revenue of Bt17 billion for a net profit of Bt1.4 billion this year, he said.