MD's Report for the 2nd. Quarter 2006
July 28, 2006
Managing Director's Report
Operating Results for the 2nd. Quarter 2006
SVI posted net Profit, for the 2nd. Quarter 2006 of Baht 71.7 Million, an increase of Baht 21 Million and Baht 4.5 Million or 42% and 7% as compared with the 1st. Quarter 2006 and the 2nd Quarter 2005 respectively, reported an improvement from 5% to 6% of revenue as compared to previous quarter.
This was mainly resulted by the increase of revenue of 24% and 12%, as compared the last quarter and the same quarter last year. The losses generated by subsidiaries, in the amount of Baht 7.3 Million, mainly caused by Tianjin plant, due to lower revenue during the start up and the process to get certification for ISO 9002 audit.
The average conversion rate of Baht to USD in 2nd Quarter 2005 was Baht 39.99 whereby the average rate was Baht 38.16 in 2nd. Quarter 2006. This impacted to reduce revenue of Baht 58 Million or 4.6% as compared to the same rate of Q2 last year.
Q2's sale was at USD 31.6 Million or Baht 1,204 Million, 12% higher than the same quarter last year and an increase of 24% as compared to the 1st.Quarter this year. The increase of revenue as compared to the same period last year was driven by new customers, started the business with the company since last year. The demand on Industrial product continue to be strong.
Total Gross Profit for the 2nd quarter 2006 was Baht 113 Million or 9.4% of revenue, representing an increase of 1% of revenue as compared to last quarter and in line with the same period last year. The improvement of gross profit from Q1'06 was mainly due to product mixed and lower materials costs, related to the conversion rate of USD to Baht of imported materials and revenue was based on the similar rate.
Selling and Administrative expenses of the company were Baht 46 Million or 4% of revenue, a decrease of Baht 4 Million from the same Quarter last year, mainly related to less materials obsolescence reserve. The consolidated expenses for this quarter were Baht 51 Million, including Tianjin plant. Both the company expenses and consolidated expenses were Baht 5 Million higher than last quarter with more personnel adding in new product and business development team.
Profit & Loss Comparison Table-Q2'06 vs Q2'05
| Unit : Baht'000 |
Consolidated |
The company |
The company |
% |
|
Q2'2006 (a) |
Q2'2006 (b) |
Q2'2005 (c) = (a)-(c) |
Variance (c) | |
| Net Sales |
1,204,305 |
1,210,015 |
1,128,910 |
7% |
| Total Costs of Sales |
1,091,290 |
1,095,356 |
1,023,449 |
7% |
| Gross Profit |
113,015 |
114,659 |
105,461 |
7% |
| Total Operating Expenses |
(51,242) |
(46,350) |
(50,189) |
2% |
| Operating Profit |
61,773 |
68,309 |
55,272 |
12% |
| Interest Income (Expense) |
(1,986) |
(2,089) |
(1,534) |
29% |
| Exchange Gain (Losses) |
7,753 |
7,753 |
4,197 |
85% |
| Gain (Losses) from subsidiaries |
(7,321) |
|||
| Other Non-Operation Income (Expense) |
6,346 |
7,234 |
10,772 |
-41% |
| Net Income Before Tax |
73,886 |
73,886 |
68,707 |
8% |
| Corporation Tax |
(2,186) |
(2,186) |
(1,553) |
41% |
| Net Income after Tax |
71,700 |
71,700 |
67,154 |
7% |
Comparison of 2nd. Quarter 2006 Balance Sheet with year end 2005 as follow:
| Unit : In Million Baht |
Q2 Year 2006 |
End of Year 2005 | ||
|
Consolidated |
The company |
Consolidated |
The company | |
|
(a) |
(b) |
(c) |
(d) | |
| Current Assets | ||||
| Cash and current | ||||
| investment |
111 |
90 |
301 |
282 |
| Accounts Receivable |
969 |
975 |
764 |
764 |
| Inventories |
1,227 |
1,224 |
940 |
940 |
| Other Current Assets |
26 |
25 |
26 |
27 |
| Total Current Assets |
2,333 |
2,314 |
2,031 |
2,013 |
| Current Liabilities | ||||
| Short term loans |
0 |
0 |
0 |
0 |
| Accounts Payable |
853 |
853 |
565 |
567 |
| Other Current Liabilities /Accruals |
167 |
164 |
139 |
137 |
| Total Current Liabilities |
1,020 |
1,017 |
704 |
704 |
| Working Capital |
1,313 |
1,297 |
1,327 |
1,309 |
| Property, Plant, Equipment and other assets |
693 |
722 |
657 |
676 |
| Total Net Assets |
2,006 |
2,019 |
1,984 |
1,985 |
| Financed by : Long-term Debt |
44 |
57 |
73 |
74 |
| Net equity |
1,962 |
1,962 |
1,911 |
1,911 |
| Total Long-term Financed |
2,006 |
2,019 |
1,984 |
1,985 |
The Company financial status as of 30 June 2006 showed total assets of Baht 3,026 Million, an increase of Baht 338 Million as compared to 31st December 2005, due to the increase of inventory of Baht 287 Million and an increase of account receivable of Baht 205 Million, partially offset with the decrease in cash of Baht 189 Million, it was mainly related to the increase of revenue and more purchase of materials both for lead free and non-lead free products during the transition to build lead free products this year and to support the ramp up of sales in the next quarter.
The company has provided loan to subsidiaries, Globe Vision Corp., in the amount of Baht 58 Million, an increase of Baht 22 Baht from the end of last year, mainly for the investment in a subsidiary in Hong Kong and subsequently invested in China.
Total liabilities was recorded at Baht 1,064 Million, an increase since 31st December 2005 of Baht 287 Million, mainly due to an increase of Trade Payable related to purchase more materials with partially offset with the decrease of long term loan of Baht 31 Million, due to the payment made this year.
Shareholder's equity as at the end of 2nd Quarter 2006 was Baht 1,962 Million, higher than that the end of last year by Baht 51 Million or 2.7%, mainly due to an increase in retained earnings derived from net profit of Baht 122 Million this year and partially offset with the payment of dividend of Baht 72 Million this year.
_____________________
Mr. Pongsak Lothongkam
Managing Director
