Single Point Parts expects flat growth

Seubtrakul Binthep, director of SPPT, said yesterday that both revenue and net profit this year might be similar to last year. The global economic downturn has directly reduced clients' purchasing power.

Already this year, orders for every product segment and all types of customer have dropped by 40 per cent from the same period last year. The company is therefore unlikely to post an impressive performance during the first quarter, when these orders will be fulfilled.

He added that orders had declined because clients still have plenty of inventory on their books. Besides, customers are waiting to see how the economic trend unfolds.

In general, the first quarter is also the low season for SPPT because Japanese clients - which account for 80 per cent of its customers - end their accounting periods in March or April.

Seubtrakul expects clients to resume their orders in the third quarter of this year, because the US economic stimulus package will then take effect and purchasing power should begin to recover.

However, if the situation does not improve as the company expects, SPPT has a back-up plan - to move into one building lathes that currently operate in three buildings, thus saving on operating costs.

"As far as I'm concerned, it won't necessary to use this plan. I still believe the global economy will recover soon," he said.

SPPT's revenue in the first nine months of last year was Bt661 million, an increase of 33.39 per cent from the same period in 2007. Its net profit in the period was Bt63.28 million, an increase of 19.1 per cent from Bt53.13 million in the first nine months of 2007.

Seubtrakul said the company recently laid off 300 subcontract employees, which it had recruited through four firms. It will continue to adjust the number of its workers in line with the economic situation.

SPPT said it had paid compensation to the laid-off workers.