News Detail

Date/Time
25 Feb 2019 17:24:00
Headline
Management Discussion and Analysis Yearly Ending 31 Dec 2018
Symbol
BSBM
Source
BSBM
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                Management Discussion and Analysis

Company name                             : BANGSAPHAN BARMILL PUBLIC COMPANY 
LIMITED
Year                                     : 2018
Quarter                                  : Yearly
Ending                                   : 31-Dec-2018
Note                                     :
The Company would like to disclose the Financial Statements (audited) for the 
year ended 31 December 2018 with management explanation as following.

Income Statements Analysis, Comparison of 2018 VS 2017

    Revenue from sales in the year was decreased from Baht 2,329 million in 2017 to
Baht 2,229 million in 2018 or 4.3% yoy, due to the reduction in sales volume
from 134,261 MT in 2017 to 115,208 MT in 2018 or 14% yoy. The major decrease
came from the reduction in local demand of steel bar as a result of the
declining of the economy. The global steel price is still volatile, remained at
the high level in the first half of the year before it continued to drop in the
second half of the year. However, the average selling price increased from Baht
17,345 per MT in 2017 to Baht 19,347 per MT in 2018.
    The Company's cost of sales was at Baht 2,145 million and Baht 2,135 million in
2018 and 2017, respectively and the gross profit rate was at 3.8% and 8.3%. The
gross profit rate in 2017 was significantly dropped from 2017 due to the
reduction in metal spread, margin between steel selling price and cost of steel
billet, from the average of Baht 3,223 per MT in 2017 to Baht 2,790 per MT in
2018. The major raw material, steel billet, which accounted for 85-90% of the
cost of sales had the strong impact to gross profit of the Company. Moreover, in
2018 the Company reduced cost of inventories by Baht 8.6 million to reflect the
 net realizable value as the declining of steel price.
    The selling expenses were at Baht 28.9 million and Baht 39.2 million in 2018 
and 2017, respectively which accounted for 1.3% and 1.7% of total sales in 2018
and 2017, respectively. The major expense was the transportation cost which
directly related with the sales volume at the approximately rate of 1-2 %. The
administrative expenses were at Baht 26.8 million in both 2018 and 2017. The
major expenses were the employee expenses which were remained in the same level
from last year.  For the other income, the Company had the income from sales of
scrap of Baht 17.6 million and Baht 29 million in 2018 and 2017 with the related
cost of sales of 5.7 million and Baht 10.3 million in 2018 and 2017,
respectively. In 2017, the Company received the compensation income from the
flood damage totaling Baht 14.8 million.
    As a result of the reasons mentioned above, the Company generated the net 
income of Baht 33 million in 2018 which was significantly decreased from net
income of Baht 132 million in 2017.

Analysis of Balance Sheet, for the Year Ended 31 December 2018
    The Company's total assets at end of 2018 and 2017 were Baht 1,959 million and 
Baht 2,012 million, respectively. The current assets decreased from Baht 1,152
million at end of 2017 to Baht 1,120 million at end of 2018 as Accounts
Receivable balance was decreased while Inventory balance was increased from the
end of 2017. This was due to the decrease in sales in the fourth quarter from
the previous year.    
Total liabilities at end of 2018 and 2017 were Baht 43.4 million and Baht 72.8 
million, respectively. The decrease in liabilities mainly came from Trade
Accounts Payable as a result of decreasing billet orders in 2018.
    The Company's liquidity ratio at end of 2018, 31.2 times, was increased from 
the ratio of 17.5 times at end of 2017. This high liquidity ratio reflects the
high liquidity and the strong financial position of the Company. On the other
hand, the Company's debt-to-equity ratios were still low at 0.02 and 0.04 at the
end of 2018 and 2017, respectively, resulting from the use of fund mainly came
from the shareholders' equity instead of long term loan.
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