P.C.S. sees no increase in revenue

P.C.S. Machine Group Holding Plc (PCSGH), a SET-listed auto parts manufacturer, expects its revenue in 2015 to stay the same as last year’s 4 billion baht due to the declining automotive industry.

Chief executive Prasong Adulratana-nukul said the company’s revenue would be affected by the overall automotive industry because it is a first-tier auto parts manufacturer for car makers.

He cited figures from the Thailand Automotive Institute that the country’s total car output declined by 1.9% to 933,679 vehicles in the first half.

Domestic sales fell by 16.3% to 369,109 vehicles in the same period, while exports increased slightly by 2.86% to 576,073 vehicles.

“It seems export volume cannot offset the sluggish domestic market,” he said.

To achieve the country’s full-year production target of 2.05 million vehicles, each car maker has to try harder to increase sales by 20% in the second half to make the total of 1.12 million vehicles.

In the first half, the performance declined slightly by 0.3% to 2.09 billion baht, but net profit fell sharply by 24.6% to 330 million baht.

Mr Prasong said the company still had higher fixed costs and expenses from new orders, which increased by 5.3% to 1.7 billion baht. Its gross profit margin was 19.1%, slightly below its target of 20%.

“As an auto parts maker, we can’t postpone the coming parts orders and manufacturing investment. Consequently, we didn’t cut our annual spending budget of 200 million baht,” he said.

At present, the company has orders for auto parts worth a combined 11.9 billion baht under contracts for five-10 years.

As part of its 2015 investment, the company has spent 175 million baht on a 5-megawatt solar rooftop to produce electricity for internal use at its plant in Nakhon Ratchasima. This will reduce fixed costs by 20-30 million baht annually.

Mr Prasong aims to adjust P.C.S.’s revenue structure, which largely depends on auto parts for pickup trucks at 99% of the total to 75%. It will then increase parts manufacturing for passenger cars and big bikes to 25% of the total by 2019.

Current customers i nclude Isuzu (30.9%), General Motors (18.4%), Mitsubishi (17.4%), Ford (16.3%), Toyota (8.8%) and Nissan (2.8%).

He expects the automotive industry to recover from next year.

PCSGH shares closed on Friday on the SET at 6.55 baht, unchanged, in trade worth 8.3 million baht.