Q3/2010 Operating Results

Revenue dropped 37% due to construction delays. Over 1 billion baht sales backlog to be realized in Q4 and next year.

Mr.Chuan Tangmatitham, President of M.K. Real Estate Development Public Company Limited (M.K.), "Chuan Chuen" and "Serene House" project developer, revealed that the company has recognized Bt 332.73 million revenue from sales and services  in Q3/2010, 36.96% decreased QOQ from Bt 527.81 million.  Main projects contributing to revenues in this quarter were Chuan Chuen Modus Charan-Pinklao, Chuan Chuen Modus Centro and Chuan Chuen Petkasem.  As some construction was delayed due to the weather in rainy season, some land title deed transfer have to be postponed to Q4/2010, affecting revenue in Q3/2010.  Revenue from sales and services for nine-month period was Bt 1,776.45 million, decreased 4.97% from the revenue of a year earlier which was Bt 1,869.32 million.  The company now has approximately Bt 1,000 million sales backlog on hand which is to be recognized mostly in the last quarter of 2010 and the rest in next year.

For Q3/2010, MK has realized Bt 129.06 million in gross profit, dropping 37.35% QOQ from Bt 206.00 million because of decreasing revenue.  Gross profit margin of Q3/2010 at 38.79% was not much different from 39.03% of Q2/2010.  For the nine-month period gross profit was Bt 700.47 million with gross profit margin at 39.43%, comparing to 40.90% from the same period of last year.  Selling expenses increased by Bt 40.73 million YOY, from Bt 45.89 million to Bt 86.62 million.  This was the result of the special business tax applied at the normal rate of 3.3% since Q2/2010 coupled with increasing sales promotion to stimulate sales after the end of tax privileges.   SG&A to sales increased from 11.00% to 16.04%.  MK's net income for Q3/2010 was Bt 44.77 million (Bt 0.05 earning per share), decreased by 43.30% QOQ.  For the nine-month period net income was Bt 318.64 million (Bt 0.37 earning per share) and net profit margin ratio decreased to 17.60%, comparing to 21.73% of 2009.

The Company's assets increased by Bt 153.40 million from last quarter, from Bt 6,133.01 million to Bt 5,979.61 million, as we have purchased new land plots for new project development.  Meanwhile, liabilities increased around Bt 194.64 million, from Bt 1,214.65 million to 1,409.29 million.  Hence, Debt to Equity ratio increased from 0.26 time to 0.30 time.