Performance and Financial Position

In 2017, the Company sold it’s products both domestically and internationally. Domestic sales were 35% of sales and export sales were 65% of total sales of the total unit of 2.44 million sets of compressors sold. Total revenues from sales and services income was Baht 9,263.91 million, with a 2.71% gross profit margin and a net loss operation of Baht 172.75 millio. This operation loss was impacted by the world economic situations. Some countries such as United States of America, Japan and Europe countries and the Thailand there was an economic improvement but in Thailand overall problems existed such as farmers facing the lower price of agriculture products, and stiff competition from China for compressors. This pressure of high competition continues to effect prices especially for small reciprocating motor compressors for household refrigerators refleted in the lower sales amount and quantity, while at the same time seeing higher costs of product impacted by increasing price of main materials such as copper and steel. Copper prices increased by more than 25% in the last year and steel prices by more then 20%.

Under such circumstances, the Company has employed many strategies in order to respond to customers’ needs in terms of prices, develop strong relationship with its customers, improve production productivity, as well as reducing the product costs by using alternative raw materials and aims to make the product technology and production of motor compressor congruent with market needs and comply with the rules and regulation of refrigerants in relation to environmental issues.

Pricing of the Company is determined by relevant factors such as changing production costs from rising costs of steel and copper, competitive landscape, and customer order quantity.

Performance

(1) Revenues from sales and services income

The revenues from sales and services income of the Company and its subsidiary for 2017 was Baht 9,263.91 million, compared to the approximated Baht 8,665.89 million of sales and services income of the previous year, an increase of Baht 598.02 million or 6.90%, was due to less demand which effected by both the world wide and Thailand economic situations. There was a high competition in the industry, which caused continuing price reductions especially for small reciprocating motor compressors for household refrigerators that is refleted in the lower sales amount and quantity. However, the company was able to get higher sales of the bigger motor compressors for commercial refrigerators and air conditioner and also more sales for the copper wires and steels parts when compared to the previous year. However, the net sales quantity for motor compressors down by 10.75% when compared to the previous year.

(2) Gross profit margin

The gross profit margin of 2017 and 2016 of the company were 2.71% and 7.55%, a decrease of 4.84% caused from the increasing price of main materials of copper and steels, which respectively increased by more than 25% and 20%. In addition, the appreciated value of Thai Baht affected the selling price in a competive sales market.

(3) Operation Expenses

  • Selling Expenses of the Company and its subsidiary for 2017 approximated Baht 126.06 million, compared to the approximated Baht 87.15 million of the previous year, an increase of Baht 38.91 million caused from the increased amount of warranty products and commission expenses of sales.
  • Administrative Expenses of the Company and its subsidiary for 2017 approximated Baht 436.48 million, compared to the approximated Baht 446.76 million of 2016 was nearly same amount. - The company and its subsidiaries got gain on foreign exchange rate for 2017 approximated Baht 17.93 million while the 2016 got loss on foreign exchange rate approximated Baht 11.86 million which resulted from import transactions of copper and steel materials and export sales of compressors and the efficient management for forward exchange contracts.

(4) Others Income

Income from scrap sales of the Company and its subsidiary for 2017 approximated Baht 245.01 million, compared to the approximated Baht 168.90 million of the previous year, an increasing of Baht 76.11 million or 45.06% as the sales price of copper and steels scrap were impacted by the higher material cost from 2016.

Financial Position

The consolidated total assets in 2017 was Baht 7,297.33 million, a decrease of Baht 449.58 million from Baht 7,746.91 million in 2016, mainly resulted by the decrease of inventory approximated of Baht 204.70 million and the decrease of fixed assets approximated of Baht 225.17 million.

The consolidated total liabilities in 2017, was Baht 5,071.84 million, a decrease of of Baht 137.10 million from Baht 5,208.94 million in 2016, mainly resulted by the decreased long term loan approximated of Baht 200 million.

The consolidated total shareholders’ equity in 2017 was Baht 2,225.49 million, compared to the approximated Baht 2,537.96 million of the previous year, a decrease of Baht 312.47 million caused from the loss operations of 2017 approximated Baht 172.75 million and the paid dividend from retained earning approximated Baht 120 million in May 2017.