RT announces its business plan for 2022, targeting a 50% revenue growth to reach 4 billion baht. The company is set to recognize continuous income from construction projects both domestically and internationally, aggressively bidding for high-margin government contracts and large-scale infrastructure projects, pushing the backlog to a new record of 8.5 billion baht. An investment budget of 570 million baht will be allocated to purchase specialized machinery for new projects, while closely monitoring the COVID-19 situation.

Mr. Chawalit Thanomthin, CEO of Right Tunneling Public Company Limited (RT), a specialist in civil engineering and geotechnics, revealed the company's business direction for 2022, aiming for a 50% revenue growth to reach 4 billion baht while maintaining a gross profit margin of 12-15%.

This year, the overall business outlook is promising, with ongoing projects progressing as planned and revenue being recognized continuously. The large-scale infrastructure projects from the government are being constructed according to the economic development plan, requiring expertise from companies with experience and specialization, of which there are few contractors like RT, alongside private sector construction projects.

For 2022, the company expects to recognize revenue from major construction projects such as the tunnel construction for the double-track railway project in the northeastern region, the Maekabao-Chumthong Jirarat contract 3 in Saraburi-Nakhon Ratchasima, the tunnel construction for water diversion in Chiang Mai, the construction of the water gate at Si Song Rak by the Royal Irrigation Department in Loei, the construction of a chamber and underground electrical conduit in conjunction with the Yellow Line electric train project, highway construction in Na Thawi, Songkhla, and slope protection works.

Additionally, the company plans to increase bids for government projects, building on its role as a subcontractor, focusing on high-margin work and large-scale national infrastructure projects, such as tunnels, dams, irrigation systems, and underground electrical conduits. Some projects are expected to announce winning bidders and sign contracts starting from the first quarter of 2022 onwards.

In terms of international projects, the company has opportunities to take on hydropower projects in the Lao People's Democratic Republic and is currently negotiating with main contractors, with clarity expected in the fourth quarter of 2022, allowing for revenue recognition in 2023.

This operational plan will result in a total backlog of 8.5 billion baht this year, marking a new record high since the company's inception, with revenue to be recognized gradually in 2022-2023.

Moreover, the company has set an investment budget of 570 million baht, with approximately 86% allocated for the purchase of machinery and construction materials to prepare for new projects requiring specialized tools, such as soft soil tunnel boring machines. The remaining budget will be used for purchasing tools, vehicles, and other construction project needs.

Regarding the COVID-19 pandemic, it remains a factor to monitor this year. However, the company continues to closely observe the situation to adjust operational plans according to measures such as regular testing for construction site employees to screen at-risk groups, isolating and treating infected individuals, and coordinating with relevant agencies for regular site inspections.

“This year's operations, despite uncertainties from the COVID-19 situation and the nature of the projects being large-scale with revenue recognition over the next 3-5 years, may reflect a decrease in gross profit margins due to these processes, leading to increased expenses. However, the company has adequately reserved budget for this and has managed operations effectively, as evidenced by its ability to control and reduce risks while completing construction on time,” said Mr. Chawalit.

Currently, the revenue breakdown by project type includes tunnel construction at 52.18%, dam and irrigation system construction at 18.35%, underground electrical conduit work at 18.15%, and other works at 11.32%, such as road construction and slope protection. The domestic revenue share is 99.22%, while international revenue accounts for 0.78%.