P.C.S. gloomy about outlook

P.C.S. Machine Group Holding Plc (PCSGH), a SET-listed auto parts manufacturer, is feeling pessimistic about its prospects and expects flat revenue this year.

Chief executive Prasong Adulratananukul said myriad negative factors were affecting the automotive industry including Thailand’s gloomy economic prospects, low farm prices, the ongoing drought and high household debt.

He forecasts Thai vehicle output will be roughly similar to last year’s 1.91 million units.

“Local car sales will be bearish, while export volume is unlikely to offset the decline,” Mr Prasong said. “As an original equipment manufacturer (OEM), the company is inevitably hard hit by the automotive industry.”

The Federation of Thai Industries’ automotive industry club forecasts domestic sales will dip 2.5-6.2% this year to 750,000 to 780,000 vehicles, a fourth consecutive contraction after the first-time car buyer scheme expired in 2012. Vehicle sales posted a record high of 1.44 million that year, up 80.6%.

The club expects car exports to rise 1-3% this year to 1.22-1.25 million.

P.C.S. reported all-time-high revenue of 5.29 billion baht in 2012, up 66.8% from 2011, with a net profit of 1.7 billion baht, up 116%, propelled by the first-time car buyer scheme.

It posted revenue and profit drops to 5.12 billion baht and 1.38 billion respectively in 2013. Its revenue plunged to 4.01 billion baht in 2014 with a net profit of 717 million.

The company reported its revenue edged up by 1.9% in 2015 to 4.09 billion baht, with net profit down by 24.5% to 542 million baht.

Its net profit margin has declined over the last four years from 32.2% in 2012 to 26.7% in 2013, 17.5% in 2014 and 13.1% in 2015.

Mr Prasong said P.C.S. had been diversifying to be an OEM for big trucks and big bikes with purchase orders worth 1.2 billion baht and 200 million baht respectively.

PCSGH shares closed yesterday on the Stock Exchange of Thailand at 5.05 baht, up five satang, in trade worth 6.81 million baht.