Performance and Financial Position

During the past 2-3 years, the reciprocating compress business still encounters fierce competition both locally and internationally. This has been greatly impacted by unclear economic situations world wide, in Thailand and a turn down for economic conditions of China. Under these 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. In 2016 the Company sells its products domestically and internationally in the portion of 35% and 65% respectively. And pricing of the Company is determined by factors such as changing production costs, costs improvement and price competition by market demand.

Performance

(1) Revenues from sales and services income

The revenues from sales and services income of the Company and its subsidiary for 2016 was Baht 8,665.89 million, compared to the approximated Baht 10,544.38 million of sales and services income of the previous year, a decrease of Baht 1,878.49 million or 17.82%, resulted by the suppression of customers demand caused from the economic situation of Thailand was effected from natural disaster and of the world wide economic situation also was not well recovered.

(2) Gross profit margin

The gross profit margin of 2016 and 2015 of the company were the same rates of 7.55% caused from the continued price reduction of main materials of copper and steels, depreciated value of Thai Baht, a better cost management, more sales of the profitable models and the business compettion of price reduction to serve customers’ demand.

(3) Operation Expenses

  • Selling Expenses of the Company for 2016 approximated Baht 87.15 million, compared to the approximated Baht 162.84 million of the previous year, a decrease of Baht 75.68 million caused from the slightly turndown sales.
  • Administrative Expenses of the Company and its subsidiary for 2016 approximated Baht 446.67 million, compared to the approximated Baht 391.99 million of 2015 an increase of Baht 54.77 million caused from the increased allowance for doubtful accounts from export sales of one foreign customer approximated Baht 33.82 million and for 2014 approximated Baht 446.67 million was included the related expenses of the SAP program implementation for new enterprise resource palnning system of the company.
  • The company and its subsidiaries got loss on foreign exchange rate for 2016 approximated Baht 11.86 million while the 2015 got loss on foreign exchange rate approximated Baht 18.19 million resulted from import transactions of copper and steels materials but the 2014 got gain on foreign exchange rate approximated Baht 13.45 million.

(4) Others Income

Income from scrap sales of the Company for 2016 approximated Baht 168.90 million, compared to the approximated Baht 219.14 million of the previous year, a decrease of Baht 50.24 million or 22.93% caused from sales price of copper and steels scrap were decreased from 2014 and the slightlt turndown sales in 2016.

Financial Position

The consolidated total assets in 2016 was Baht 7,746.91million, a decrease of Baht 469.89 million from Baht 8,216.80 million in 2015, mainly resulted by the decrease of inventory approximated Baht 110.66 million, the decrease of fixed assets approximated Baht 172.88 million which effected from the depreciated amount and the decrease of account receivable approximated of Baht 260.35 million.

The consolidated total liabilities in 2016, was Baht 5,208.94 million, a decrease of Baht 358.33 million from Baht 5,567.27 million in 2015, resulted by the decreased loan from 3 financial institutions approximated of Baht 121.57 million, and the decreased trade account payable and other payable approximated of Baht 134.63 million and others.

The consolidated total shareholders’ equity in 2016 was Baht 2,537.97 million, compared to the approximated Baht 2,649.53 million of the previous year, a decrease of Baht 111.56 million caused from the dividend payment in May 2016.