12 Nov 2018 17:08:00
Management Discussion and Analysis Quarter 3 Ending 30 Sep 2018
Management Discussion and Analysis Company name : BANGSAPHAN BARMILL PUBLIC COMPANY LIMITED Year : 2018 Quarter : Quarter 3 Ending : 30-Sep-2018 Note : Income Statements Analysis, Comparison of Quarter 3 of 2018 VS Quarter 3 of 2017 Revenue from sales in Q3 of 2018 was at Baht 561.6 million, decreased by 13.4% yoy, due to the lower domestic demand of steel bar and the expectation of its price in downward trend. Therefore, sales volume in Q3 this year of 28,148 MT was 22% lower than the sales volume in the same period of last year. Meanwhile, the average selling price has continued to rise as a result of the market mechanism and the world steel bar price. In the third quarter of 2018, the Company's gross profit margin was at Baht 24.7 million or 4.4%, significantly decreased from the gross profit margin of Baht 44.7 million or 6.9% in the same period last year. This derived from the reduction of the spread between selling price and cost of the major raw material - steel billet (Metal spread) as the increasing rate of the billet cost was higher than the selling price of the steel bar. Cost of steel billet generally accounts 85-90% of total cost of the goods sold, therefore, the decrease in Metal Spread has the major impact to the gross margin. The average spread of this year was Baht 408 lower than the spread of last year. In the third quarter of 2018 and 2017, the Company received the income from sales of scrap of Baht 5.5 million and Baht 7.1 million, respectively, with the related cost of sales totaling Baht 2.3 million and Baht 3.9 million, respectively. Meanwhile, in the third quarter of last year the Company received the compensation from the flood damage of Baht 1.6 million. The selling expenses in Q3 of 2018 and 2017 were at Baht 7.2 million and Baht 10.3 million, respectively. The major expense was the transportation cost which directly related with the sales amount at the approximate rate of 1-2%. The administrative expenses which most of them represented the employee expenses were slightly decreased from the same period of last year. As a result, the Company had the net income of Baht 11.5 million in Q3 of 2018, 56.5% decreased comparing to the net income of Baht 26.4 million in the same period last year. For the nine-month ended 30 September 2018, the Company had the net income of Baht 31.4 million, 71.6% decreased from the net income of Baht 110.4 million in the same period of last year. Analysis of Statement of Financial Position, for the Quarter Ended 30 September 2018 As at 30 September 2018, the Company's total assets, Baht 2,006.4 million, were slightly increased from the balance of Baht 2,012.3 million at the end of 2017. This was mainly came from the reduction in trade receivable and the inventory balance as a result of sales decreased in the third quarter of 2018. The Company's average periods of trade receivable and inventory held were at 59 days of revenue from sale and 42 days of cost of the goods sold, respectively. Total liabilities as at 30 September 2018, Baht 92.2 million, were significantly increased from those of Baht 72.8 million at end of 2017. The major increase came from the increase in accounts payable-trade from the purchase of billet. The Company's liquidity ratio (Current Assets / Current Liabilities) as at 30 September 2018 ,13.7 times, was lower than the ratio as at 31 December 2017 of 17.5 times due to the increase in trade payable from the purchase of billet. Moreover, the Company's debt-to-equity ratios as at 30 September 2018 and 31 December 2017 were still low at 0.05 and 0.04 time, respectively. These were because the Company funded most of capital from shareholders' equity instead of long-term loan. This announcement was prepared and disseminated by listed company or issuer through the electronic system which is provided for the purpose of dissemination of the information and related documents of listed company or issuer to the Stock Exchange of Thailand only. The Stock Exchange of Thailand has no responsibility for the correctness and completeness of any statements, figures, reports or opinions contained in this announcement, and has no liability for any losses and damages in any cases. In case you have any inquiries or clarification regarding this announcement, please directly contact listed company or issuer who made this announcement.