3-year Financial summary

Financial Highlights (Consolidated Financial Statements)

  FY/2015 FY/2014 FY/2013
  (Baht in millions, except share, per share data and ratio)
Statement of Income
Sales of residential condominium units 5,042.34 6,547.11 5,656.43
Total Revenues 5,145.49 6,647.15 5,765.69
Cost of residential condominium units sold 3,016.13 3,832.48 3,627.26
Total Expenses 3,846.15 4,874.80 4,603.45
Gross Profit from core business 2,026.21 2,714.64 2,029.17
Net profit (loss) 900.46 1,224.50 746.34
Net profit (loss) - Equity holders of the Company 900.90 1,224.52 746.27
Statement of Financial Position
Total assets 9,946.98 11,190.70 13,584.43
Total liabilities 5,495.99 7,646.52 11,277.98
Issued and paid up share capital 3,575.48 3,575.42 3,575.42
Total shareholders’ equity 4,450.99 3,544.17 2,306.45
Equity attributable to owners of the Company 4,448.42 3,541.17 2,302.06
Liquidity Ratios (Times)
Current ratio 2.09 1.57 1.25
Quick ratio 0.18 0.17 0.13
Profitability Ratios (%)
Gross profit margin (1) 40.18% 41.46% 35.87%
Net profit margin 17.50% 18.42% 12.94%
Return on equity (2) 22.55% 41.91% 38.73%
Return on assets 8.52% 9.89% 5.22%
Efficiency Ratios (Times)
Total assets turnover 0.51 0.59 0.42
Leverage Ratios (Times)
Debt to equity ratio 1.23 2.16 4.89
Interest-bearing debt to Equity 0.65 1.00 2.36
Interest coverage ratio (3) 8.48 13.28 6.75
Percentage of Growth (% per year)
Total asset growth -11.11% -17.62% -9.42%
Total liabilities growth -28.12% -32.20% -16.09%
Total shareholder’s equity growth 25.59% 53.66% 48.24%
Total revenues growth -22.59% 15.29% 4.45%
Total expenses growth (4) -18.68% 5.88% -0.75%
Per Share Ratios (Baht)
Earnins per Share 0.25 0.34 0.21
Book Value per Share (5) 1.24 0.99 0.65
Other Financial Data
Net cash flows from operating activities 657.76 1,914.42 (75.28)
Net cash flows from investing activities 9.20 (61.74) (26.46)
Net cash flows from financing activities (659.63) (1,910.73) (773.34)

(1) Gross profit margin = (total sales–cost of sales)/total sales, whereas total sales consists of sale of residential condominium units

(2) Return on equity = Profit (loss)-Equity holders of the Company/the average of total shareholders’ equity of this year and last year

(3) Interest coverage ratio = Profit (loss) before finance cost and income tax/finance cost, finance cost means interest and other charges associated with financing eg. front end fee, etc.

(4) Exclude the impairment loss of investment properties and reduction of project development cost to net realisable value

(5) Book value include non-controlling interests of the subsidiaries

MANAGEMENT DISCUSSION AND ANALYSIS

OVERALL PERFORMANCE

For FY2015, The Company achieved consolidated net profit and EBITDA of Baht 900 million and Baht 1,365 million respectively. Consolidated gross margin marginally decreased from 41% in FY2014 to 40% in FY2015.

As of 31 December 2015, backlog totaled Baht 6,964 million, with Unixx South Pattaya contributing to 33% of total amount. The Lofts Ekkamai constituted 28% of total backlog, with 185 Rajadamri, the Lofts Asoke, Zire Wongamat, the River, and Mews Yen Akat constituting 12%, 11%, 11%, 3% and 2% respectively.

Due to steady transfer of units at 185 Rajadamri, Zire Wongamat and the River, the Company was able to pay back Baht 655 million worth of debt. As a result, consolidated interest-bearing debt to equity ratio stood at 0.65 times as of 31 December 2015, a reduction from 1.00 times as of 31 December 2014.

DISCUSSION ON PROFIT AND LOSS

Revenues

In FY2015, the Company recorded consolidated revenues of Baht 5,145 million, a decrease of Baht 1,502 million (or 23%) when compared with FY2014. 98% of consolidated revenues was derived from recognized sales income (i.e. transfer income) from residential condominium units for 4 projects, namely: 185 Rajadamri (Baht 2,795 million or 54%), Zire Wongamat (Baht 1,716 million or 33%) The River (Baht 513 million or 10%), and Unixx South Pattaya (Baht 18 million or 1%)

Project FY2015 FY2014
  Revenue
(Million Baht)
% Revenue
(Million Baht)
%
185 Rajadamri 2,795 54% 5,044 76%
Zire Wongamat 1,716 33% 144 2%
The River 513 10% 1,321 20%
Unixx South Pattaya 18 1% - 0%
Northpoint - 0% 38 1%
Others* 103 2% 100 1%
Total 5,145 100% 6,647 100%

* Include rental and service income, marketing commission income, project management fee, interest and others

Cost of Goods Sold

In FY2015, consolidated cost of goods sold decreased mainly from reduction of transfer units at 185 Rajadamri.

Project FY2015 FY2014
  Cost of sales
(Million Baht)
% Cost of sales
(Million Baht)
%
185 Rajadamri 1,472 49% 2,843 74%
The River 325 11% 853 22%
Zire Wongamat 1,208 40% 100 3%
Unixx South Pattaya 11 0% - 0%
Northpoint - 0% 36 1%
Total 3,016 100% 3,832 100%

Gross Profit Margin

Consolidated gross profit margin reduced marginally to 40% in FY2015, a reduction from 41% in FY2014. However, the Company still maintained healthy gross profit margin as compared to that of 36% in FY2013.

Selling and Administrative Expenses

Consolidated selling and administrative expenses were second largest expenses for the Company. Consolidated selling and administrative expenses represented 22% of total expenses for FY2015. The amount decreased from Baht 1,042 million in FY2014 to Baht 830 million in FY2015 (a 20% decrease). The decrease was driven mainly by reduction in special business tax and transfer fees, and reduction of project development costs to net realizable value.

Selling and administrative expenses FY2015
(Million Baht)
FY2015
(Million Baht)
Change
FY2014 - 2015 (%)
Salary and staff benefits and management’s remuneration 224.3 252.0 -10.99%
Special business tax & transfer fees 210.4 283.5 -25.78%
Other selling expenses 116.0 127.7 -9.16%
Other expenses 279.3 379.1 -26.33%
Total 830.0 1,042.3 -20.37%

Cost of Financing

Consolidated cost of financing primarily resulted from interest costs in association with development loans, which are capitalized as development costs for respective projects till completion. Thereafter, such interest costs will be recorded as finance costs in the Statement of Income. Upon project completion, loans are repaid in installments along with transfer of ownerships. For FY2015, the Company’s consolidated cost of financing increased due to the facts that construction of Zire Wongamat was completed during 4Q2014, thus interests associated with the project was booked under cost of financing, up until the Company fully paid loan associated with the project in 3Q2015. In addition, the Company issued THB 500 million debenture back in 29 July 2015, at interest rate of 4.80% per annum. As a result the Company’s cost of financing increased year-on-year.

Net Profits (Losses)

In FY2015, The Company had consolidated net profit of Baht 900 million, compared with Baht 1,225 million in FY2014. The decrease was due to following reasons:

  1. Consolidated transfer revenue was reduced by 23% or THB 1,505 million. The reduction was attributable to reduction in transfer associated with 185 Rajadamri of THB 2,249 million, the River of THB 808 million, Northpoint of THB 38 million. The increase of transfer associated with Zire Wongamat and Unixx South Pattaya of THB 1,572 million and THB 18 million, respectively, however could not offset the reduction mentioned previously.
  2. The Company’s consolidated gross margin decreased marginally from 41% in FY0214 to 40% in FY0215.
    FY2015 Earnings Per Share 0.25 Baht
    FY2014 Earning Per Share 0.34 Baht

DISCUSSION ON BALANCE SHEET

Assets

The Company’s consolidated total assets, as at 31 December 2015, decreased by 11% when compared to that of 31 December 2014. Significant changes in consolidated total assets as per followings:

  1. Reduction of project development costs due to unit transfer associated mainly with 185 Rajadamri, the River and Zire Wongamat
  2. Construction progress of projects resulting in reduction in advance payment to contractors of THB 275 million
  3. Reduction of deferred tax assets of THB 144 million due to reduced difference between revenue recognition from accounting basis and tax basis of 185 Rajadamri and Zire Wongamat, resulting in non - current asset being reduced significantly

Liabilities

As of 31 December 2015, the Company’s consolidated total liabilities decreased by Baht 2,151 million (YoY decrease of 28%). Interest bearing debt and non-interest bearing debt reduced by THB 655 million and THB 1,496 million respectively. The reduction was due mainly for loan repayment and revenue recognition associated with deposits mainly attributable to Zire Wongamat and 185 Rajadamri.

Shareholders' Equity

As of 31 December 2015, consolidated Shareholders’ Equity totaled Baht 4,451 million, an increase of Baht 907 million (or 26%YoY) from FY2014, due to consolidated net profit totaling of Baht 900 million for the FY2015.

DISCUSSION ON CASH FLOWS AND CAPITALIZATION

Cash Flows

  FY2015
(Million Baht)
Cash and cash equivalents at the beginning of the year 498
Net cash flow from operating activities 658
Net cash flow from investing activities 9
Net cash flow from financing activities (660)
Cash and cash equivalents at the end of the year 505

During 2015, the Company had a positive net cash flow from operating activities totaling Baht 658 million, primarily resulting from cash inflow associated with unit delivery at Zire Wongamat and 185 Rajadamri.

During 2015, the Company had a negative net cash flow from financing activities totaling Baht 660 million, primarily due to loan repayment at Zire Wongamat at THB 1,662 million, net of issuance of debentures and project loans drawn down at subsidiary totaling THB 1,010 million.

Overall, the ability to transfer units at Zire Wongamat in the Company’s reduced consolidated interest-bearing debts by approximately THB 655 million. In addition, FY2015 consolidated net profit of THB 900 million increased shareholders’ equity base, resulting in interest bearing debt to equity ratio reduced from 1.00x to 0.65x for FY2014 and FY2015 respectively.

Commitments and Contingent Liabilities

The Company and its subsidiaries have pending litigation cases, relating to allegations of breaches of agreements to purchase and to sell from some customers and torts. However, the Company and its subsidiaries are defending the lawsuits, and since the Company’s lawyers and management believe that the Company and its subsidiaries will not have a material effect from the litigation, no addition entries have been made in respect of these cases beyond provision already recorded.