25 Feb 2019 17:24:00
Management Discussion and Analysis Yearly Ending 31 Dec 2018
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. 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.