SET-listed contractor Teka Construction has shifted its focus to international schools, hospitals and data centres to compensate for fewer condo projects as demand is dampened by high interest rates.
Suphon Chongchintaraksa, the chief financial officer, said the company submitted bids for 10 new projects collectively worth 5 billion baht in the first half of this year, the majority of which were for international schools and hospitals, with some other bids being for data centres.
"There has been significant investment in international schools and private hospitals, and we have participated in the bidding process," he said. "The results should be announced in the third and fourth quarters of this year."
The construction know-how required for international schools is not complex, while hospitals require specialised systems work, for which the company has partners with the relevant expertise.
However, these projects -- including data centres -- generate a 3-5% higher margin than condos, which generated a margin of around 10% due to high competition and fewer projects, said Mr Suphon.
"The condo market has slowed down due to shrinking demand hampered by the rises in interest rates," he said. "To maintain our growth, we have focused on quality to secure jobs from large developers who are still launching new projects in the second half."
In the first half of the year, the company secured three new projects worth a combined 1.5 billion baht.
Two of these are projects of Sansiri Plc, including Via Sukhumvit 61, an eight-storey condo worth 243 million baht. Construction on this project began last month.
The other Sansiri project is The Standard Residences Hua Hin, comprising eight low-rise condo towers, three car park buildings, four shophouses and three multipurpose towers, collectively valued at 598 million baht.
The third project is The Panora Baan Amphur, which includes four seven-storey condo towers worth 728 million baht.
As of the end of June 2024, Teka had a total backlog of 3.16 billion baht, which comprises an ongoing backlog of 1.62 billion baht and 1.5 billion baht from the new projects.
In the first half of the year, the company recorded 1 billion baht in revenue with a net profit of 88.7 million baht, up 19% and 141%, respectively.
It expects to reach 2.2 billion baht in revenue by the end of the year, representing a 5-10% increase over 2023.
