MD's Report for the 3rd. Quarter 2006
October 30, 2006
Managing Director's Report Operating Results for the 3rd. Quarter 2006
SVI posted revenue for the 3rd Quarter 2006 at USD 38.4 Million or Baht 1,444 Million, 48.5% higher than the same quarter last year and an increase of 21.6% as compared to the previous Quarter this year, in term of USD. The sales growth was realized despite the 9% strengthen of Baht (Baht 41.19 VS Baht 37.63 / USD 1) and 1% stronger (Baht 38.16 VS Baht 37.63 / USD 1) as compared to the 3rd Quarter last year and the 2nd Quarter this year. The revenue growth was driven by new customers that started the business with the company since last year. The demand for Industrial products continues to be strong.
Total Gross Profit for Q3'06 was Baht 143 Million or 9.9% of revenue, representing a slight increase of 0.5% of revenue as compared to last quarter and lower than the same period last year by 1%. The reduction of gross profit as compared to Q3 last year was mainly due to the strengthen of Baht, resulted by the conversion rate of USD to Baht upon receiving of imported materials higher than the conversion rate upon recognizing of revenue,
Net Profit was Baht 85.5 Million or Baht 0.59 per shares. This represented an increase of Baht 13.8 Million and Baht 15 Million or 19% and 21% from previous quarter and the same quarter last year, respectively. The losses generated by subsidiaries for the quarter was Baht 6 Millions as a result of lower revenue during the qualification of Tianjin factory. The plant has since been certified for ISO 9002 and in the process of ramping up in Q4, 06.
Selling and Administrative expenses of the company were Baht 60 Million or 4% of revenue, an increase of Baht 8 Million from the same Quarter last year, mainly related to materials obsolescence reserve and additional personnel to support new product and business development team. Including Tianjin plant's losses of Baht 6 Million, the consolidated expenses for this quarter were Baht 66.6 Million.
Profit & Loss Comparison Table-Q3'06 vs Q3'05
| Unit : "Million" Baht |
Consolidated Q3'2006 (a) |
The company Q3'2006 (b) |
The company Q3'2005 (c) |
% Variance = (a)-(c) (c) |
| Net Sales |
1,444 |
1,448 |
1,064 |
36% |
| Total Costs of Sales |
1,301 |
1,306 |
947 |
37% |
| Gross Profit |
143 |
142 |
117 |
22% |
| Total Operating Expenses |
(67) |
(60) |
(51) |
31% |
| Operating Profit |
76 |
82 |
66 |
15% |
| Interest Income (Expense) |
(2) |
(2) |
(0) |
|
| Exchange Gain (Losses) |
3 |
3 |
1 |
200% |
| Gain (Losses) from subsidiaries |
(6) |
0 |
||
| Other Non-Operation Income (Expense) |
8 |
8 |
6 |
33% |
| Net Income Before Tax |
85 |
85 |
73 |
16% |
| Corporation Tax |
(3) |
|||
| Net Income after Tax |
85 |
85 |
70 |
21% |
Comparison of 3rd. Quarter 2006 Balance Sheet with year end 2005 as follow:
| Unit : In"Million" Baht |
Q3 Year 2006
|
End of Year 2005 | ||
|
Consolidated (b) |
The company (b) |
Consolidated (c) |
The company (d) | |
| Current Assets | ||||
| Cash and current investment |
157 |
142 |
301 |
282 |
| Accounts Receivable |
1,057 |
1,057 |
764 |
764 |
| Inventories |
1,316 |
1,310 |
940 |
940 |
| Other Current Assets |
69 |
78 |
26 |
27 |
| Total Current Assets |
2,599 |
2,587 |
2,031 |
2,013 |
| Current Liabilities | ||||
| Short term loans |
0 |
0 |
0 |
0 |
| Accounts Payable |
1,017 |
1,016 |
565 |
567 |
| Other Current Liabilities/ Accruals |
141 |
159 |
139 |
137 |
| Total Current Liabilities |
1,158 |
1,175 |
704 |
704 |
| Working Capital |
1,441 |
1,412 |
1,327 |
1,309 |
| Property, Plant, Equipment and other assets |
687 |
716 |
657 |
676 |
| Total Net Assets |
2,128 |
2,128 |
1,984 |
1,985 |
| Financed by : | ||||
| Long-term Debt |
74 |
74 |
73 |
74 |
| Net equity |
2,054 |
2,054 |
1,911 |
1,911 |
| Total Long-term Financed |
2,128 |
2,128 |
1,984 |
1,985 |
The Company financial status as of 30 September 2006 showed total assets of Baht 3,286 Millions. This represented an increase of Baht 598 Millions as compared to 31st December 2005, due to an increase of inventory of Baht 376 Millions and an increase of account receivable of Baht 293 Millions. The additional inventories were purchased to meet strong demand in Q4,06.
The company has provided loan to subsidiaries, Globe Vision Corp., in the amount of Baht 57 Million, an increase of Baht 21 Baht from the end of last year, mainly to support the investment in China subsidiaries, Hong Kong and Tianjin.
Total liabilities were recorded at Baht 1,232 Millions, an increase of Baht 455 Millions from 31st December 2005. This was mainly due to an increase of Trade Payable related to purchase of additional materials and partially offset with the decrease of long term loan of Baht 43 Million, due to the payment made this year.
Shareholder's equity as of the end of 3rd Quarter 2006 was Baht 2,053 Millions, Baht 142 Millions or 7.4% higher than that of the end of last year. This was mainly due to an increase in retained earnings derived from net profit of Baht 207 Million this year and partially offset with the payment of dividend of Baht 72 Million earlier this year.
_____________________
Mr. Pongsak Lothongkam
Managing Director
