LVT Posting Large Sales Growth

Tuesday 19 February 2013 15:12
L.V. Technology Public Company Limited (LVT), the MAI-listed engineering consultancy with ongoing operations in various parts of the world, is posting substantial gains in new jobs estimated to be worth more than 1.7 billion baht in the first quarter this year.

The company’s robust business momentum is coming after a recent successful capital increase in which small shareholders over-subscribed new shares allocation by about 33%. Some 215 million baht was raised from the capital-increase exercise. With another 51 million new shares being set aside for a private placement (PP), the total proceeds that will be used for business expansion and new investments will be about 280 million baht.

With the estimated over 1.7 billion baht worth of new jobs to be booked in the current quarter, LVT founder and president Hans Jorgen Nielsen has expressed confidence that the company is well on the way to achieve the all-year sales target of 3 billion baht. The new sales are on top of about 2 billion baht worth of backlog at the end of last year.

According to Mr. Nielsen, the new jobs being signed in this quarter include a US$ 13.9 million porcelain plant in northern Brazil, a new cement grinding facility in Bahrain worth over US$ 9 million, the upgrading of a white-cement plant in Malaysia also worth over US$9 million, plus another contract to modernize a state-run cement plant in Myanmar worth about 780 million baht. Services to be rendered by LVT for these jobs include engineering designs, procurement and installation of equipments and machineries.

Mr. Nielsen added that negotiations are also under way for several other jobs, including projects in the Philippines and South Africa. In view of the early gains of new jobs during the current quarter, he was confident that the all-year target of 3 billion baht of new jobs will be achieved.

On top of trying to secure new engineering consultancy contracts as the company has traditionally been doing, LTV is also adopting a new corporate strategy with plans to invest in new assets that can generate recurrent revenue and profits into the longer-term future.

Top on the priority list of such possible new investments is a joint venture with local partners in the booming cement industry in Myanmar, where LVT has cultivated favorable relations with the government authorities as well as leading private industrial groups.

The targeted new investments in Myanmar will be financed by proceeds from the recent capital increase plus revenue from the recently-concluded partial divestment of an LVT subsidiary in India, LNVT, that will raise roughly 260 million baht about 157 million baht of which is expected to be booked as profits on a consolidated basis.