Although Thailand’s overall economy in 2024 grew by 2.6%, surpassing the 1.8% growth rate in 2023, the real estate sector had to face multiple risks in 2024. On the demand side, the purchasing power was weak due to the household debt burden, which soared above 90% of the Gross Domestic Product (GDP). As a result, financial institutions tightened mortgage loan approval causing the mortgage loan approval rate to fall below 30%. On the supply side, the real estate sector faced rising housing development costs due to increasing land and construction material prices. Consequently, in 2024, the number and value of new projects launched by the real estate sector declined, along with the decrease in the number and value of housing property transfers, compared to 2023.
Such circumstances put pressure on real estate developers, requiring them to adjust their business strategies in response to the evolving situations. L.P.N. Development Public Company Limited (LPN) revised its business plan and drove the organization toward resilience by rebalancing business operations (Rebalance for Resilience) in response to the circumstances.
In 2024, the Company implemented cost structure management to address rising construction costs, driven by higher lands and construction materials price that increased along with energy prices. Additionally, financial costs, such as interest rates, remained high despite a reduction of interest rates to 2.25% in Q3/2024 – a 0.25% decrease from 2.50% in the beginning of the year. The Company delayed its plan to invest in new property projects in 2024 and accelerated the sales of inventory to reduce the interest expense burden from holding assets and enhance financial liquidity while maintaining targeted profitability.
In 2024, LPN launched four new projects with a combined value of approximately 4.19 billion baht. One of them is a residential condominium project, valued at approximately 980 million baht, namely Place 168 Wutthakat. The other three are residential home projects with a combined value of approximately 3.21 billion baht, including Baan Lumpini New Nakhonpathom, Baan 365 Sukhumvit 77 and Villa 168 New Krungthepkreetha. This aligned with the expected decline in purchasing power in the market in 2024, compared to 2023.
Adjustment of Sales and Revenue Targets
At the same time, LPN had adjusted its sales and revenue projection in response to the eco-nomic situation and the declining purchasing power. In 2024, the Company’s total sales were 8.46 bil-lion baht with around 78% coming from residential condominium projects and 22% from residential home projects. As a result, total revenue in 2024 was 8.01 billion baht, representing a 8% increase from the total revenue of approximately 7.444 billion baht in 2023. The total revenue in 2024 consisted of the approximately 5.49 billion baht revenue from residential property sales, which was comparable to the approximately 5.1 billion baht recorded in 2023, and the approximately 2.5 billion baht revenue from project management, rental business and service business, which increased by 7% approximately from 2023. The net profit was approximately 211 million baht, decreasing from the approximately 353 million baht in 2023. The totally backlog from residential condominium projects and residential home projects was approximately 1.3 billion baht at the end of 2024 which will gradually be recognized in 2025-2026.
In 2024, 6 projects, with an approximate combined value of 7.5 billion baht, were completed and ready to be handed over, including 2 residential condominium projects and 4 residential home projects as follows.
Residential condominium projects with an approximate combined value of 4.15 billion baht, including
- Lumpini Ville Charan – Fai Chai
- Lumpini Place Chaengwatthana-Pakkret Station
Residential home projects with an approximate value of 3.35 billion baht including,
- Residence 168 Ratchaphruek
- Haus 24 Westgate
- Baan Lumpini New Nakhonpathom
- Villa 168 New Krungthepkreetha
Cost Management and Cost Reduction to Increase Work Efficiency
LPN developed a cost reduction plan by implementing digital transformation to increase efficiency of all operating segments and generated more recurring income from existing assets, such as renting out condominium units initially intended for sale. The Company also prepared a financial liquidity enhancement plan by managing cash flow to ensure sufficient resources for the business operations for at least 6 months, eliminating unnecessary expenses and speeding up the construction of projects with purchasing volumes to ensure that they are completed and handed over to customers as planned.
Meanwhile, the Company delayed its investment plan and land procurement. As a result the debt ratio was decreased. In 2024, the interest-bearing debt to equity ratio declined from 1.08 : 1 in 2023 to 0.88 : 1 as at 31 December 2024 and the debt-to-equity ratio declined from 1.22:1 in 2023 to 1.03 : 1 as at 31 December 2024.
The Company still upheld the financial discipline, maintained a debt equity ratio of not more than 1:1 as well as kept the investment portfolio balanced for future growth.
Taking care of stakeholders and being socially accountable
Since employees have been the heart and engine of the organization, LPN has had an approach to take care of employees by encouraging them and providing them opportunities to learn new technology and innovation. 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 1,827 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.
Based on the revised business plan and the performance results for 2024, the Executive Committee Meeting No. 1/2025, held on 27 February 2025, resolved to declare an annual dividend for the 2024 fiscal year at the rate of 0.10 baht per share. On 8 August 2024, the Company paid an interim dividend at the rate of 0.05 baht per share. The remaining dividend will be paid at the rate of 0.05 baht per share. The ex-dividend date (XD) is fixed on the 11 March 2025 and the record date is set on 13 March 2025. The dividend will be payable on 9 May 2025.
