MD's Report Year 2005
February 15, 2006
Managing Director's Report
Operating Results for the 4th Quarter and Year 2005
SVI posted net Profit for the 4th. Quarter 2005 of Baht 86 Million, an increase of Baht 18 Million compared with the 4th Quarter 2004. Total year net Profit has been achieved at Baht 256.7 Million, an increase of Baht 73 Million from previous year, or improved from 4% to 6% of revenue.
This mainly resulted from less materials costs, gain on Fx exchange and lower corporate income tax as more products being built in BOI's promoted project. As compared to the previous quarter, the net profit was increased by Baht 16 Million or 23%.
Total Gross Profit for the 4th. quarter 2005 was Baht 116 Million or 11% of revenue, representing an increase of 1% of revenue as compared
to the 4th. Quarter 2004. Total year gross Profit was Baht 407 Million, higher than last year, Baht 3 Million, related to lower revenue this year. It's representing an improvement from 8% to 9% of revenue as compared to the previous year, mainly due to product mixed, couple with lower materials costs. The consolidated gross profit was Baht 409 Million, Baht 2 Million higher than the company, due to elimination of inter company purchasing costs.
Q4's sale was at USD 26 Million or Baht 1,076 Million, in line with the previous quarter. It was USD 12 Million or Baht 468 Million lower than the same quarter last year. Total year revenue was USD 110 Million or Baht 4,398 Million, compared with last year at USD 120 Million or Baht 4,843 Million. A reduction of 8% of revenue this year was driven by exiting non-value added customers. Industrial demands continue to be strong.
Selling and Administrative expenses of the company and consolidated expenses for this quarter were Baht 43 Million and Baht 48 Million or 4% of revenue, in line with the same period in 2004. Total year expenses of the company were Baht 187 Million, and consolidated expenses were Baht 193 Million, compared to last year expenses at Baht 167 Million. The increase was mainly a result of additional marketing expenses, materials sourcing expenses, and the reserve of obsolescence materials.
The losses of subsidiaries were Baht 3.7 Million, mainly related to operation costs in Tianjin, China, during the start up.
Profit & Loss Comparison Table-2005 vs 2004
| Consolidated Year End (a) | The company Year End (b) | The company Year End (c) | % Variance = (a)-(c) | |
| Unit : Baht'000 |
2005 |
2005 |
2004 |
(c) |
| Net Sales |
4,398,385 |
4,398,385 |
4,843,283 |
-9% |
| Total Costs of Sales |
3,989,508 |
3,991,552 |
4,438,823 |
-10% |
| Gross Profit |
408,977 |
406,833 |
404,460 |
1% |
| Total Operating Expenses |
(192,521) |
(187,326) |
(166,539) |
16% |
| Operating Profit |
216,456 |
219,507 |
237,921 |
-9% |
| Extraordinary (expense) |
0 |
0 |
0 |
0 |
| Interest Income (Expense) |
(4,031) |
(3,527) |
(3,999) |
1% |
| Exchange Gain (Losses) |
19,2351 |
9,235 |
(6,050) |
-418% |
| Gain (Losses) from subsidiaries |
(3,686) |
|||
| Other Non-Operation Income (Expense) |
36,4573 |
6,588 |
10,976 |
232% |
| Net Income Before Tax |
268,118 |
268,118 |
238,848 |
12% |
| Corporation Tax |
(11,459) |
(11,459) |
(55,360) |
-79% |
| Net Income after Tax |
256,659 |
256,659 |
183,488 |
40% |
Comparison of year end 2005 balance sheet with year end 2004 as follow:
|
Consolidated Year End (a) |
The company Year End (b) |
Only Year End (c) |
Increase (Decrease) = (a)-(c) | |
|
Unit : Baht Million (Btm) |
2005 |
2005 |
2004 |
(c) |
| Current Assets | ||||
| Cash and current investment |
301 |
282 |
96 |
204 |
| Accounts Receivable |
764 |
764 |
973 |
-209 |
| Inventories |
940 |
940 |
883 |
57 |
| Other Current Assets |
27 |
27 |
44 |
-17 |
| Total Current Assets |
2,031 |
2,013 |
1,996 |
35 |
| Current Liabilities | ||||
| Short term loans |
0 |
0 |
190 |
-190 |
| Accounts Payable |
565 |
567 |
605 |
-40 |
| Other Current Liabilities/Accruals |
139 |
137 |
119 |
20 |
| Total Current Liabilities |
704 |
704 |
914 |
-210 |
| Working Capital |
1,327 |
1,309 |
1,082 |
245 |
| Property, Plant, Equipment and other assets |
657 |
677 |
647 |
10 |
| Total Net Assets |
1,984 |
1,986 |
1,729 |
254 |
| Financed by : | ||||
| Long-term Debt |
73 |
74 |
77 |
-4 |
| Net equity |
1,911 |
1,911 |
1,652 |
259 |
Total Long-term Financed |
1,984 |
1,985 |
1,729 |
254 |
The Company financial status as of 31 December 2005 showed total assets of Baht 2.7 Billion, no significant change as compared to 31st December 2004. The increase in cash of Baht 204 Million including cash balance at subsidiaries accounted to Baht 18 Million. These consolidation statements was prepared at the first year by combing the financial statements of SVI Public Company Limited, Globe Vision Corp., SVI Electronics (Tianjin) Company Ltd. and SVI China Company Limited (Hong Kong), which are the three overseas subsidiaries, couple with the increase of inventory of Baht 57 Million, which was partially offset with the decrease in account receivable by Baht 209 Million due to less revenue. The company has provided loan to subsidiaries, Globe Vision Corp., in the amount of Baht 36 Million, mainly for the investment in a subsidiary in Hong Kong and subsequently invested in China. Total liabilities was recorded at Baht 0.78 Billion, a decrease since 31st December 2004 of Baht 0.21 Billion, mainly due to a payment of short term loan of Baht .19 Billion and reduction of Trade Payable and accrued expenses of Baht .04 Billion, partially offset with the increase of long term loan of Baht .02 Billion respectively.
Shareholder's equity as at the end of year 2005 was Baht 1.9 Billion, higher than that the end of last year by Baht 259.6 Million or 15.7%, mainly due to an increase in retained earnings derived from net profit this year.
_____________________
Mr. Pongsak Lothongkam
Managing Director
