After facing a loss in the first half, SET-listed contractor Christiani & Nielsen Thai (CNT) is expecting to turn a profit in the second half as oil and steel prices dropped.
Surasak Osathanugraha, assistant to the managing director, said oil prices, which soared from US$60 last year to $120 in June, have fallen by 30-40% at the moment and are likely be either down or flat in the second half.
The price of steel dropped from 29 baht per kilogramme to 21 baht for a month. The prices in the second half would definitely be lower than those in the first half, said Mr Surasak.
The drop in the price of two key raw materials would help lower CNT's overall construction costs.
"We saw a loss in the first half as we needed to absorb the hike in oil and steel prices in the period," he said. "With lower costs of materials, we hope to gain profit in the second half."
CNT reported a net loss of 19 million baht on revenue of 2.5 billion baht in the first half of 2022, down from a net profit of 3 million baht and revenue of 3.32 billion baht in the same period last year.
However, it maintained target revenue of 6 billion baht by year-end as the bulk of revenue would come in the third and fourth quarters.
As of the end of June, it had a backlog of 11.1 billion baht, of which 2-3 billion baht would be realised in the second half.
"We are diversifying to new businesses like an office tower for rent which we plan to develop on our land plot. If the first one is successful, we will construct second and third ones," said Mr Surasak.
A few years ago CNT diversified into renewable energy including CNES D1 which develops renewable energy-based power-producing facilities; and Christiani & Nielsen Energy Solutions, a provider of turnkey solutions for solar roofs.
Mr Surasak said the company plans to enter bids for construction projects worth a combined 10 billion baht in the second half, and expected to win bids worth 3 billion.
The majority of the bids with a total value of 4.5 billion baht are for warehouses, factories and hypermarkets.
