Management Discusscion and Analysis

Analysis of Operational Performance


Total income of the Company and subsidiaries as of 31 December 2015 stood at 2,442.19 million baht, a decrease by 1,713.95 million baht or 41.24% comparing to year 2014 where total income was 4,156.14 million baht, due to the fact that sale volume of long steel bars reduced by 2,832.32 million baht or 70.09%. The reduction followed recession and increase of steel bars import to the country which forcing the steel price to decline accordingly. The subsidiaries started recognizing income at 1,035.29 million baht which included income from sales of electricity at 77.88 million baht from total 4 projects with 8.92 MW capacity. Another source of income was project development which was recognized at 957.41 million baht in total 5 projects, with 32.42 MW capacity.

Cost of sales and service

As of 31 December 2015, cost of sale and service totaled at 2,110.04 million baht, a decline of 1,776.84 million baht or 45.83%, comparing to 2014 due to the decrease of steel sale volumes and economic slowdown. However, the subsidiaries started recognizing income from cost of electricity sale and project development at 798.81 million baht.

Sale expense

Total cost of sales as of 31 December 2015 amounted 28.02 million baht, a decrease of 30.68 million baht or 52.26% comparing to year 2014, as a result of reduction in sale volume, therefore, the cost of transportation and other expense relating to sales were reduced accordingly.

Administrative expenses

Administrative expenses for the year end as of 31 December 2015 amounted to 243.06 million baht, an increase by 199.76 million baht or 426.47 percent comparing to the previous year, due to business expansion in the renewable energy power projects.

Financial cost

The Company financial cost as of 31 December 2015 was 149.53 million baht, an increase by 74.02 million baht or 98.03% comparing to last year as the Company acquired more loan from the financial institution to expand solar power plants in Japan.

Net loss

The Company’s and subsidiaries’ net loss as of 31 December 2015 amounted to 110.42 million baht, representing 4.92% and return on shareholder’s equity at 8.69% in comparison of year 2014 where the net profit was 47.34 million baht or 1.15%, and net return on equity of 3.65 %. The net profit and profit were reduced by significant drop of steel price which followed the economic downturn.

Financial Analysis


As of 31 December 2015 the Company’s total asset amounted of 8,092 million baht, decrease by 3,364 million baht or 71%. The significant increase of asset occurred from accounts receivable and other receivables, cost of project under development, pledged deposits at financial institutions, investment in associated companies, property, plant and equipment, intangible assets. During the year, the company group invested in solar power plant business in Japan and this increased the volume of assets. The source of capital was acquired through loan.


In 2014 the net cash flow was spent in operating activities at the amount of 333 million baht, investment activities at 2,817 million baht. Short and long term loan were put to investment in products of associated companies and solar power plant at the amount 3,243 million baht. At a result, the company group’s total net cash flow increased by 95 million baht.

Source of fund

  • Liabilities
    Total liabilities of the Company accounted 6,780 million baht, increasing by 3,430 million baht, as a result of short and long term loan acquired from the financial institutions to invest in products of associated companies and the solar power plant.
  • Shareholders' equity
    Shareholders’ equity in company group stood at 1,312 million baht, down by 66 million baht due to the a loss of 110 million baht.
  • Structure of fund
    The ratio of debt to shareholders’ equity as at 31 December 2015 ranked 3.1 times in comparing to year 2014 which was at 2.47 times, as a result of increasing loan acquired from financial institutions.

The remuneration of the auditor for year 2015

Audit Fee
The Company paid audit fee to AST Master Co., Ltd., the Company’s auditor for the accounting year 2015, at the amount of 1.02 million baht, including the audit fee for its subsidiaries at 1.37 million baht.

Other expenses
The Company and its subsidiaries did not use additional service from other auditors.