MD's Report Operating Results for the Q1/2006
May 8, 2006
Managing Director's Report
Operating Results for the 1ST. Quarter 2006
SVI posted net Profit, before subsidiary consolidation, for the 1st. Quarter 2006 of Baht 56 Million, an increase of Baht 21 Million or 60% as compared with the 1st. Quarter 2005, or improved from 2.9% to 5.6% of revenue. This mainly resulted from less materials costs, and lower corporate income tax due to more products being built in BOI promoted project. The losses generated by subsidiaries, in the amount of Baht 5.4 Million, mainly caused by Tianjin plant, due to less revenue during the start up in March this year. The company's consolidated net profit was Baht 50.4 Million. As compared to the previous quarter,the net profit was decreased by Baht 35.6 Million.
This was mainly related to lower revenue driven by seasonal demand and the increase of materials costs driven by stronger Baht. The average conversion rate of Baht to USD in 4th Quarter 2005 was Baht 40.95 whereby the average rate was Baht 39.28 in 1st.Quarter2006. This impacted by increasing the materials over Sales margin of 3%.
Total Gross Profit for the 1st. quarter 2006 was Baht 83 Million or 8% of revenue, representing an increase of 2% of revenue as compared to the same period last year and decrease of 2% of revenue as compared to the previous quarter, mainly due to the strengthen of Baht as mentioned above. The consolidated gross profit was no significant change from the company's profit as the operation in Tianjin plant being started in March'06.
Q1's sale was at USD 25 Million or Baht 997 Million, 13.8% lower than the same quarter last year or a decrease of 3.8% as compared to the 4th.Quarter last year. A reduction of revenue as compared to the same period last year was driven by exiting non-value added customers. The sales decrease from the 4th Quarter last year was driven by lower demand for Medical Laboratory and Prof-A/V.Industrial demands continue to be strong.
Selling and Administrative expenses of the company were Baht 42 Million or 4.2% of revenue, a decrease of Baht 2 Million from the same Quarter last year.The consolidated expenses for this quarter were Baht 47 Million, including Tianjin plant. Both the company expenses and consolidated expenses were in line with the last quarter.
Profit & Loss Comparison Table - Q1'06 vs Q1'05
| Unit : Baht '000 | Consolidated Q1'2006 (a) |
The company Q1'2006 (b) |
The company Q1'2005 (c) |
% Variance = (a)-(c) (c) |
| Net Sales | 996,544 | 997,402 | 1,129,649 | -12% |
| Total Costs of Sales | 912,575 | 914,133 | 1,061,257 | -14% |
| Gross Profit | 83,969 | 83,269 | 68,392 | 23% |
| Total Operating Expenses | (46,856) | (41,595) | (44,050) | 6% |
| Operating Profit | 37,113 | 41,674 | 24,342 | 52% |
| Interest Income (Expense) | 166 | 166 | (1,588) | -60% |
| Exchange Gain (Losses) | 4,400 | 4,400 | 7,875 | -44% |
| Gain (Losses) from subsidiaries | (5,351) | |||
| Other Non-Operation Income (Expense) | 8,802 | 9,592 | 4,690 | 105% |
| Net Income Before Tax | 50,481 | 50,481 | 35,319 | 43% |
| Corporation Tax | (104) | (104) | (2,232) | -95% |
| Net Income after Tax | 50,377 | 50,377 | 33,087 | 52% |
Comparison of 1st.Quarter 2006 Balance Sheet with year end 2005 as follow:
| Unit :In Million Baht |
Q1 Year 2006 |
End of Year 2005 | ||
| Consolidated | The company | Consolidated | The company | |
| Current Assets | ||||
| Cash and current investment | 184 | 160 | 301 | 282 |
| Accounts Receivable | 791 | 792 | 764 | 764 |
| Inventories | 1,076 | 1,075 | 940 | 940 |
| Other Current Assets | 45 | 45 | 27 | 27 |
| Total Current Assets | 2,096 | 2,072 | 2,031 | 2,013 |
| Current Liabilities | ||||
| Short term loans | 0 | 0 | 0 | 0 |
| Accounts Payable | 643 | 641 | 565 | 567 |
| Other Current Liabilities/Accruals |
133 | 138 | 139 | 137 |
| Total Current Liabilities | 776 | 779 | 704 | 704 |
| Working Capital | 1,320 | 1,293 | 1,327 | 1,309 |
| Property, Plant, Equipment and other assets | 698 | 725 | 657 | 677 |
| Total Net Assets | 2,018 | 2,018 | 1,984 | 1,986 |
| Financed by : | ||||
| Long-term Debt | 56 | 56 | 74 | 74 |
| Net equity | 1,962 | 1,962 | 1,911 | 1,911 |
| Total Long-term Financed | 2,018 | 2,018 | 1,985 | 1,985 |
The Company financial status as of 31 March 2006 showed total assets of Baht 2.8 Billion, an increase of Baht 106 Million as compared to 31st December 2005, due to the increase of inventory of Baht 135 Million and an increase of account receivable of Baht 28 Million, partially offset with the decrease in cash of Baht 122 Million, it was mainly related to the purchase of materials both for lead free and non-lead free products during the transition to build lead free products mid of this year, as some suppliers will stop supplying non-lead free materials soon.
The company has provided loan to subsidiaries, Globe Vision Corp., in the amount of Baht 60 Million, an increase of Baht 24 Baht from the last quarter, mainly for the investment in a subsidiary in Hong Kong and subsequently invested in China.
Total liabilities was recorded at Baht 0.83 Billion, an increase since 31st December 2005 of Baht 55 Million, mainly due to an increase of Trade Payable of Baht 74 Million, partially offset with the decrease of long term loan of Baht 19 Million, due to the payment made in Q1 this year.
Shareholder's equity as at the end of 1st. Quarter 2006 was Baht 1.96 Billion, 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 50.4 Million this year.
_____________________
Mr. Pongsak Lothongkam
Managing Director
