Management Discusscion and Analysis

Analysis of Operational Performance

Net Profit

The consolidated net profit for the year ended 31 December 2017 was 307 million baht; this was an increase from the previous year of 207 million baht or 737% from full year 2016, which reported its net profit of 37 million baht. This was as a result of the following reasons:

Cost of Sales and Service

The consolidated cost of sales and service for the year ended 31 December 2017 was 3,047 million baht; an increase of 802 million baht or 35% from the previous year. This was due to:

  • A higher cost of sales for steel business of 772 million baht; this was directly related to the higher volume of Sales
  • Cost of production of electricity increased by 10 million baht as total energy production increased. The main components of this increase were depreciation as well as operation and maintenance the solar plants
  • Cost of sales for trading for construction materials related to power plants decreased by 5 million baht from the previous year due to a change in product mix from customer purchase orders

Selling expenses

For the year ended 31 December 2017, the Company presented selling expenses amounting to THB 63 million baht; an increase from the same period of the previous year by THB 33 million or 110%. This was a results of the increase in volume of sales of steel billet and an increase in the cost of logistics associated with the increase in sales for the export market.

Administrative expenses

The consolidated administrative expenses for the year ended 31 December 2017 was 385 million baht; an increase of 108 million baht or 44% from the previous year. The Company reported the below details:

  • The un-capitalized project costs from the construction of Solar Plants; totally 64 million baht (including professional fee for acquisition of project; total of 13 million baht)
  • The loss from revaluation of land at 21 million baht which the company applied revaluation of total 7 pieces of land (there was also a surplus after tax of 39 million baht recorded in Other components of equity)
  • There was the loss from devaluation of accounts and accounts receivable, including the loss from the step up acquisition of the investment in joint venture from the purchase agreement of Solar Plant business; totally a reported 39.9 million baht.

Finance cost

The consolidated finance cost for the year ended 31 December 2017 was 349 million baht, increased by 236 million baht or 209% from the previous year due to the expansion of investment of Solar Plants in Japan, both operational and under construction. Long term project finance loans for previous year projects starting in Q4/16 was fully recorded in this year’s interest expense. A new Solar Plant project during this year also needed the support of long term project finance and therefore incurred additional interest expense commencing mid of this year.

Financial Analysis

Total Assets

The consolidated total assets for the year ended 31 December 2017 and 2016 was 12,565 million baht and 13,232 million baht respectively. This was lower by 667 million baht from the previous year because of the below reasons

  • Trade and other receivables was lower by 700 million baht.
  • Project cost under development decreased by 1,086 million baht.
  • Deposits pledged as collateral was lower by 1,955 million baht.
  • The investment in joint venture was lower.
  • Property, plant and equipment, and Intangible assets reported a higher amount of 2,930 million baht.

Total Liabilities

Total liabilities as of 31 December 2017 and 2016 was 11,039 million baht and 11,880 million baht respectively. This represents a reduction of 841 million baht from the previous year. The summary of details are shown below

  • Overdraft and Short term borrowing from financial institutions and related company was lower by 4,864 million baht.
  • Accounts payables and other payables increased by 259 million baht.
  • Long term liabilities increased by 2,404 million baht.
  • This addition was from receiving new long term Project finance for Solar Plants amount 1,275 million baht.

Shareholders’ Equity

The consolidated total shareholders’ equity for the year ended 31 December 2017 and 2016 was 1,525 million baht and 1,352 million baht respectively. The main increase of equity came from the net income during the year.

Audit Fee

The Company paid the remuneration of auditor to AST Master Co, Ltd. which the Company for the fiscal year 2017 in amount of 1.05 million baht and its subsidiaries in amount of 4.99 million baht.

Other service fee

The Company and Its subsidiaries did not use any other service.