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Summary of the Performance in 2022

In 2022, real estate business faced challenges from multiple crises including the elongated coronavirus disease 2019 (COVID-19) pandemic which entered its third year. Although the situations improved when compared to 2020-2021, people still had to be cautious living in this society and face economic recession. Inflation hit a 24-year high of 6.08 percent. As a result, construction costs rose in accordance with the rise in energy prices. This was a consequence of the protracted war between Russia and Ukraine that began in February 2022 until the end of 2022 and continued into 2023.

Under such circumstances, real estate developers had to adjust its business strategy to correspond with incurring situation. L.P.N. Development Public Company Limited (LPN) also had to revise its business plan and drive the organization toward resilience in response to economic uncertainty and volatility. In 2022, LPN has applied cost management practices in response to rising construction costs resulting from prices of lands and construction materials that rose along with energy prices, inflation and higher interest rate in 2022. Both financial cost management and construction cost management were implemented in order to develop projects at a reasonable price in line with existing purchasing power in the market while maintaining targeted profitability.

In the meantime, LPN has reorganized its business structure by separating the service business, LPP Property Management Company Limited, aiming to expand its service business to other business groups outside LPN business group. Moreover, LPN has also reconfigured management structure of its real estate development segment into 4 main income-generating business units including condominiums, ‘Value’ residential homes, ‘Premium’ residential homes and residential and commercial property rental business.

In addition to reorganizing to be consistent with its business plan, LPN has adjusted its project launch plans. In 2022, the Company launched eight new projects with a combined value of 10.7 billion THB. Five of them are residential condominium projects with a combined value of 8.83 billion THB namely Lumpini Place Chaengwattana-Pakkret Station, Place 168 Pinklao, Lumpini Ville Charan-Faichai, Ville 168 Bangwa and Park 168 Onnut 19. Three are ‘Value’ residential home projects with a combined value of 1.87 billion THB namely Venue 168 Ratchaphruek, Venue 168 Westgate and Venue 168 Khukhot Station. This adjustment was done in response to weakening tendency of purchasing power in the market in the latter half of 2022. As the economy tended to slow down, rising inflation rate led to higher costs of living which rose along with commodity prices

In 2022, LPN adjusted its marketing strategy and created a new brand, “168”, to expand its customer base among new generation, ages 25 to 35, (Gen Y) who was first jobbers and entrepreneurs, including start-up groups. The Company’s logo has been redesigned to be in line with future business strategy and approaches.

Sales and Revenue Targets

Due to the uncertainty of geopolitical issues between Russia and Ukraine which affected energy prices and led to global recession, economic growth was lower than expected. Although there was business reorganization, marketing strategy adjustment and reduction in the number of new project launches in 2022, the Company was able to generate sales of 10.95 billion THB, increasing by 23 percent from 2021. This was because of the marketing plan and sales strategy that stimulated purchasing power and the online and offline sales.

In 2022, the net profit of LPN was 612 million THB or increased by 102 percent from year 2021. The total revenue was 10.301 billion THB increasing by 4.073 billion THB or 84 percent. The increase came mainly from the income from ownership transfers of real estate development business which was 8.423 billion THB, increasing by 4.379 billion THB or 108 percent. Forty-five percent of that were revenue recognized from residential condominium projects. Thirty percent were revenue recognized from office building projects. Twenty-five percent were revenue recognized from residential home projects. The Company offered sales promotions to stimulate sales and decorated products to add value to the project. As a result of external factors, the economy started to return to normal. In addition, the government maintained measures to support real estate sectors almost throughout the year. Income from rental and service business increased by 13 percent because rental continued to rise as a result of the relaxation of the COVID-19 situation. Income from management fees increased by 23 percent due to the constant rises in project management services, engineering services and other services.

In 2022, seven projects, with an approximated combined value of 5.715 billion THB, were completed and ready to be handed over including four residential condominium projects, two residential home projects and one commercial building projects as follows.

Residential condominium projects with an approximate combined value of 4.405 billion THB namely

  1. Lumpini Place Taopoon-Interchange;
  2. Lumpini Selected Charan 65-Sirindhorn Station;
  3. Lumpini Ville Chaengwattana 10;
  4. Lumpini Ville Chaengwattana-Pakkret Station.

Residential home projects with an approximate value of 1.2 billion THB namely

  1. Maison 168 Latphrao 101;
  2. Lumpini Townville Saimai 18-Phahonyothin.

A commercial building project with an approximate value of 110 million THB namely

  1. Lumpini Ladkrabang-Suvarnabhumi commercial building

Cost Control and Cost Reduction to Increase Work Efficiency

LPN developed a cost reduction plan by bringing in digital technology to help increasing efficiency of all operating segments, generating more recurring income from existing assets, e.g., renting out condominium units that were for sale, eliminating unnecessary expenses as well as speeding up the construction of projects with purchasing volumes to be completed and handed over to customers as planned. The Company also adapted itself and revised the operation of various segments to be in line with the situations. It also enhanced the financial liquidity by carefully managing cash flow to ensure that it would be sufficient for the business operation for no less than 6 months. The Company still upheld the financial discipline, maintained a debt equity ratio of not more than 1:1 according to the Company’s policy as well as kept the investment portfolio balanced for future growth.

At the end of 2022, the interest-bearing debt to equity ratio of LPN decreased to 0.89:1 from 0.91:1 and the debt to equity ratio decreased to 1.03:1 from 1.09:1 in 2021.

Taking Care of Stakeholders and Being Socially Accountable

Since employees have been the heart and engine of the organization, LPN has had a way of taking care of employees by communicating consistently with them, providing health care and preparing for situations that arose by allowing employees to Work from Home. Although the COVID-19 pandemic situations were improved, LPN still applied its monitoring measure and took care of co-owners of the Company-managed communities by strictly implementing various measures than had been formulated from 2000 to today.

In addition, the Company has continued to focus on social care through L.P.C. Social Enterprise Co., Ltd., a subsidiary company that creates job opportunities for underprivileged women and elderly people. The Company employed 1,630 underprivileged women and elderly people with an aim to employ and create opportunities for at least 2,000 underprivileged women and elderly people in 2025.

From the business plan adjustment and performances in 2022, the Board of Directors’ Meeting No. 1/2023 held on 16th February 2023 resolved to approve an annual dividend for fiscal year 2022 of 0.22 THB per share. On 1st September 2022, the Company paid an interim dividend of 0.10 THB per share. The remaining dividend to be paid is 0.12 THB per share. The ex-dividend date (XD) was fixed on the 1st March 2023 and the record date was set on 2nd March 2023. The dividend was payable on 18th April 2023.

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