Delta may miss $1bn revenue goal

       SET-listed Delta Electronics (Thailand)Plc expects its revenue to miss the target of US$1 billion this year despite improving sales in the third quarter and the high growth of its Indian business.
       Although the global electronics industry has generally recovered, the telecom segment and the European market have yet to pick up, said executive director Anusorn Muttaraid.
       Corporate spending on electronic equipment has remained low in the face of global economic crisis while banks are still reluctant to extend loans to the corporate sector, he added.
       "The third-quarter results are better than those of the previous one. Business in India reported a relatively high growth but it should be better than that," he said.
       He declined to elaborate further,pending the formal release of results to the Stock Exchange of Thailand.
       "Purchasing power is still low and we might have to wait until the end of this year and early 2010 for corporate investment to pick up. Consequently,I don't think our revenue will reach $1 billion as projected," he said.
       Delta posted total revenue of 6.06 billion baht in the second quarter, down 27.3% from the same period of 2008,as the global recession caused a significant drop in sales of IT and consumer electronic products. Net profit fell 50% year-on-year to 301 million baht. In the first six months, sales were 12.56 billion baht with net profit of 812 million, down from 1.42 billion a year earlier.
       Analysts are upbeat about Delta's third-quarter results, expected to be released late next week, projecting earnings to more than double from three months earlier.
       KGI Securities forecasts Delta's net profit will reach 700 million baht in the quarter to September, up 133%quarter-on-quarter, but down 20.7%from the same period of last year.
       The brokerage raised Delta's 2009 earnings estimate by 3.8% to 2.3 billion baht with a target price of 21.10 baht per share.
       Kim Eng Securities, meanwhile, is more conservative about this year's outlook, seeing a recovery of power supply systems in the European and Indian markets in the fourth quarter.
       But Kim Eng expects an improvement in the world's financial sector and recovery in the electronics industry will help lift Delta's earning by 28% to 3 billion baht next year.
       Mr Anusorn added that the company plans to set up a subsidiary in Singapore next year when the Asean Free Trade Area (Afta) integrates Southeast Asian nations into a single production base.
       The Singapore unit will help facilitate Delta's further expansion to the Middle East and to African countries, given the island state's more favourable tax system than Thailand's for making investment abroad.
       DELTA shares closed yesterday on the SET at 17.30 baht, up 10 satang, in trade worth 18.37 million baht.