Pranda profit flat despite revenue drop

       The listed jewellery manufacturer Pranda Jewelry Plc is confident its profit this year will remain on par with 2008 despite an expected 15% drop in revenue, says the company president.
       The firm's total revenue is expected to decline by 15% year-on-year to 3.42 billion baht this year, while net profit would be about 144 million baht, said Prapee Sorakraikitikul.
       "Focusing on silver products will help us as they can produce higher margins and sales volumes. Above of all, we have seriously controlled credit orders and inventory. This will help us keep up profits this year," she said.
       Gold prices have been highly volatile this year, increasing Pranda's risk from working with the metal when compared to using the more stable silver. The firm's gold/silver ratio in terms of value currently stands at 20:80, compared to 40:60 last year, she said.
       However, gold orders may increase next year when the economy improves as customers will have more money,she said.
       Pranda's project revenue will start picking up in the second half as it has received new orders for the third quarter.Revenue will rise by at least 10% over the first half, she said.
       In the first six months, the company reported a net profit of 81 million baht on revenue of 1.59 billion baht, compared with a net profit of 203 million baht on revenue of 2.1 billion baht in the same period last year. Secondquarter net profit was 44 million baht on revenue of 808 million baht, compared with a net profit of 135 million baht on revenue of 1.14 billion in the same period a year earlier.
       The company plans to open at least 10 outlets in China next year, bringing the total to 20. It will also focus on the the Indian wholesale market, said Sunanta Tiasuwan, corporate finance chairman at Pranda.
       The newly approved waiver of 7%value-added-tax on coloured stones will improve Pranda's opportunity to add value to its products and reduce costs by up to 3%, said Ms Sunanta.
       If the baht remains stable at about 35-36 baht against the greenback, it will help Pranda to better manage its risk, she said.
       Pranda shares closed yesterday on the Stock Exchange of Thailand at 4.30 baht, up 4 satang, in trade worth 509,000 baht.