TRU slashes sales growth in half
The tepid automotive i ndustry has prompted SET-listed vehicle assembler and auto parts maker Thai Rung Union Car Plc (TRU) to cut its sales forecast to 5-6% growth from 10-12%.
Managing director Sompong Phaoenchoke yesterday said the company expected to record 2.5 billion baht in sales this year, down from 2.71 billion projected in February.
Some 57% of TRU’s revenue comes from tooling and making auto parts for car makers.
“TRU’s performance was hit hard in the first quarter thanks to the sluggish domestic car industry,” he said. “Both our revenues and profit dropped for the period.”
In the first quarter, the company reported revenue fell by 7% year-on-year to 592 million baht, while net profit dropped 39% to 32.2 million.
Mr Sompong forecast performance in the second quarter remained uncertain due to many long holidays during the period, but he felt optimistic the second-half outlook would fare much better.
The automotive industry should recover significantly once the government kicks off its new megaprojects and revs up its budget disbursement, he said.
Mr Sompong also hoped farm product prices would recover to ignite demand for pickup trucks.
But the company still cut its projection for the country’s overall car production to 2 million vehicles this year from 2.15 million.
Thailand’s total car output fell sharply by 23.5% in 2014 to 1.88 million vehicles. Of that, 881,832 vehicles were sold in the country, down by 33.7%, and 1.12 million units were for export, which saw flat growth.
The sluggish industry also affected TRU’s performance last year when the company reported revenue dropped 27% to 2.42 billion baht with net profit falling 57% to 152 million baht.
In a related development, the joint venture Trex Thairung Co, founded last year by TRU, Nippon Trex Co, Kyokuto Kaihatsu Kogyo Co and Mitsiam International, expects to start operations in Rayong’s Amata City Industrial Estate in August or September.
With registered capital of 550 million baht, TRU holds the highest stake at 40%, while Nippon Trex holds 30%, Kyokuto Kaihatsu Kogyo 15% and Mitsiam International 15%.
Trex Thairung will produce bodies for heavy-duty trucks, with annual capacity of 3,000 vehicles. Mr Sompong expects it will generate revenue of 400 million baht this year, increasing to 1.5 billion annually once the factory reaches full capacity.
TRU shares closed yesterday on the SET at 4.80 baht, down four satang, in light trade worth 45,000 baht.