News Detail

Date/Time
12 Nov 2018 17:08:00
Headline
Management Discussion and Analysis Quarter 3 Ending 30 Sep 2018
Symbol
BSBM
Source
BSBM
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                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.
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