Operating results and financial position

Analysis of the operating results

Incomes from the contracted work

Incomes of the corporate group consist of incomes from the contracted works like piling work, earth prevention dyke, civil work, foundation work, earth quality improvement, test of the piling work, other service works and other non-operating incomes such as gain on disposal of assets, foreign exchange and interest income.

In 2007, the total income of the company accounted for 1,862.88 million baht consisting of incomes from the contracted works for 1,854.88 million baht and other incomes for 7.15 million baht or 99.62% and 0.38% of the total income respectively. The income structure classified by the product lines consists of income from piling work 63 percent, income from earth prevention dyke for 10 percent, income from civil work for 8 percent, income from the foundation work for 12 percent, income from the earth quality improvement work for 2 percent, income for tests of the piling work for 1 percent and other service income for 4 percent of the total income.

In 2008, the Company had a total income of 1,621.65 million baht, consisting of making-for-hire revenue of 1,609.99 million baht and other revenue of 11.67 million baht, representing 99.28 percent and 0.72 percent of the total income respectively. Classified by product lines, the total income consists of 52 percent of revenue from bored pile, 19 percent from crib wall, 18 percent from structural and civil work, 5 percent from foundation work, 2 percent from soil quality improvement, 1 percent from pile testing work, and 3 percent of the product-line total revenue from other services. Product-line total revenue in 2008, when compared to that in 2007, decreased 13.20 percent caused by problems from real estate sector market, particularly the decrease of high-rises rendering the market more competitive than 2007.

Cost of hired works

The cost of hired works in 2007 was at 1,650.81 million baht, or representing 89 percent of the making-for-hire revenue. The cost of hired works in 2008 was at 1,485.75 million baht, or representing 92 percent when compared to 2007, increasing 3 percent the total making-for-hire revenue, as a result of the increase of construction cost due to raw materials especially steel prices and the highly varying oil prices.

Selling and administrative expenses

The selling and administrative expenses in 2008 was at 95.51 million baht, decreasing 2.75 percent from 98.22 million baht in 2007 due to better expenses control of the Company.

Bad debt

In 2007, the Company had a bad debt of 47.14 million baht, equal to 3 percent of the total making-for-hire revenue, due to a bad debt reserve for a customer with whom the Company has made a composition for it to settle the debt within 1 year on an installment basis, with monthly payment not less than 1 million baht starting on November 2008. In 2008, the Company had a bad debt of 351,011 baht equal to 0.02 percent of the total income, as a result of setting an overly high reserve for government accounts.

Gross profit and net profit

In 2007 and 2008, the group company had gross profit of 1,650.81 million baht and 1,485.75 million baht, decreasing 10 percent or representing a gross margin of 11 percent and 8 percent which decreased 3 percent from prior year, due to the substantially rising raw materials prices especially those of steels and oils. In 2007 and 2008, the group company had net profit of 22.73 million baht and 1.61 million baht, decreasing 49 percent or representing a 7 percent net margin in both 2007 and 2008. Despite the 3 percent decrease of profit margin, the group company were able to control the selling and administrative expenses on a reasonable fashion, thus resulting in the net margin equal to 2007.

Yields for shareholders

As of 2007 and 2008 year-end, the group company had shareholder yields equal to 3.9 percent and 1.9 percent, due to its net profit decrease from 22.73 million baht to 11.61 million baht.

As of 2007 and 2008, the group company had total assets equal to 1,422.18 million baht and 1,500.74 million baht, increasing 5.52 percent from 2007, consisting of those inventory assets increasing 15.55 percent from 2007 and fixed assets increasing 1.54 percent from the varying steel prices, thus keeping more steel. 

Liquidity

The group company had liquidity at 0.83 in both 2007 and 2008. The Company was able to make the liquidity better than 2007 because raw materials, such as steel, were bought by cash. Nonetheless, its cash flow in 2008 increased 17.08 whilst in 2007 it decreased 44.48 million baht, due to cash management in operating activities in 2007 equal to 70.23 million baht and in 2007 equal to (17.69) million baht.

Source of capital

In 2008, the group company had total liabilities at 897.90 million baht, current liabilities at 872.49 million baht, and long-term liabilities at 25.41 million baht, increasing the part of total liabilities equal to 9.36 percent. In 2007, it had total liabilities at 821.08 million baht, current liabilities at 800.99 million baht, and long-term liabilities at 20.09 million baht. The increasing part was due to borrowed money from financial institutions.

Audit fee

As at December 31, 2008. The company and its subsidiaries paid audit fee as follow: