SVI expects revenue to grow 22% on demand

Published on November 9, 2007

It recorded revenue of US$45.5 million (Bt1.54 billion) in the third quarter, up 19 per cent year on year and 14 per cent quarter on quarter.

The company posted a third-quarter net profit of Bt105.5 million, up sharply from the Bt85.47 million recorded in the same period last year, due to supply-chain improvement.

CEO Pongsak Lothongkam yesterday said the company's good performance was expected to continue next year, due to new production capacity at its third plant in Pathum Thani province.

It plans to spend Bt200 million to expand five production lines at the new plant.

These are expected to start operations in next year's first quarter and will focus on premium products, boosting gross margins.

Pongsak said SVI's margin would be 10.5-11 per cent next year, similar to this year's 11 per cent.

Thanks to the new plant, the company will be able to generate annual revenue $220 million at full capacity.

However, it has set a conservative revenue target of $180 million for next year.

Pongsak showed no concern about SVI's share price, following a decision by major shareholder H&Q to decrease its stake to 50 per cent by the end of this year and sell out next year. H&Q holds 60 per cent of SVI shares through DBS Vickers Securities (Singapore).

He said the decision would not have a strong negative effect on the share price, because it should be a big-lot trade.

SVIs shares were trading at Bt1.42 yesterday.

Chalida Ekvitthayavechnukul, The Nation