Message from Chairman
In 2016, the construction business sector had continuously grown due to the economic stimulus policy as well as the investment in infrastructure of the government. As a result, the investment value in the construction sector of both public and private sectors increased by 14.0% and 1.0% totally to THB 1,243 billion, comparing to 2015. Although the construction business sector expanded, the competition within the sector was relatively high amongst small, medium and large-sized enterprises. The company with the competitive level of financial position, personnel, technology and management system would be able to maintain and sustain its business. In 2016, the company entered into the biddings of numbers of public and private projects in which the company won 22 projects with the total value of THB 5.94 billion. Therefore, the value of those projects combining with the value of existing projects, the total company’s backlogs would be THB13.54 billion at beginning of the 2017. The consolidated company’s operating result for the year 2016 was improved effectively compared to the 2015 with the total revenue of THB 5.39 billion and the total comprehensive income for the period of THB 191.1 billion, equivalent to the profit per share of THB 0.17 whereas the construction business being the core business of the company generated the total revenue of THB 5.33 billion with the total comprehensive income for the period of THB 311.7 million , equivalent to the profit per share of THB 0.28.
Although the total revenue of construction business decreased by 15.3% in 2016, comparing to that in the 2015, resulted from the recognized revenue of the new projects acquired during the year being lower than the target. However, the gross profit and comprehensive income for the period still maintained at 10.2% and 5.8%, respectively. The company had other incomes at the amount of THB 377.9 million accounting to 7.1% of the total income, in which 51% of other income were derived from the disposals of subsidiaries of Power Prospect Company Limited (PPC) and Sittarom Development Company Limited (STR), which were approved in the Extraordinary General Meeting of Shareholders No.1/2016 on 28 June 2016. Regarding the financial cost of the company for the year 2016, it was relatively high, accounting to 3.18% of the total revenue as the company had issued debentures and bills of exchange to high net-worth customers apart from financing activities with the financial institutions in order to maintain the liquidity as well as to support the business expansion. For the consolidated revenues of the company decreased by 12.6% due to the disposals of the abovementioned 2 subsidiaries at the beginning of the 2016.
In 2016, the company implemented in accordance with the plan including the disposals of non-core assets, STR and PPC, which had the negative impact to the company during the past years and/or would also be in the future. The company received cash flow at the amount of THB 532 million from such disposals which have already enhanced the company’s liquidity. In terms of the capital increase, the Extraordinary General Meeting of Shareholders No.2/2016 on 18 October 2016 approved the issuance of 1,633,620,423 shares including 1,089,080,282 shares for the existing shareholders at the price of THB 1.0 per share and 544,540,141 shares to reserve for the exercise of warrants (PLE–W3) which offers to the existing shareholders who subscribed for increased ordinary shares at the ratio of 2 new ordinary shares for 1 unit of PLE-W3. Nevertheless, there are remaining unsubscribed ordinary shares from the allocation, the remaining new shares can be offered to the new investors in private placement. However, such share issuance to the existing shareholders was responded only 10%, relatively lower than expectation because the share price trading in the market was lower than the price offered by the company at that time. Nevertheless, the increasing of company’s capital remained essential for the company to establish the confidence of customers, partners and financial institutions in which the Board of Directors have to push forward the capital increased in the 2017. The increased capital with strategic partners will encourage and strengthen the overall potential of the company and competitiveness in line with the company’s business expansion in the 2017 particularly in the participation of biddings for the large construction projects of government increasing by 17% to THB 831 billion and private sectors increasing by 4.5% to THB 566.58 billion, which will be occurred during the 2017.
The Board of Directors are confident that the continuous improvement and development in operations and personnel of the company in the recent years which the company continues to do so are the major factors for the business success. Furthermore, the supports and coordination with all stakeholders to improve the Supply Chains together with the corporate governance, being another essential success factor will encourage the company’s sustainable achievement in the future. The Board of Directors would like to take this opportunity to express sincere gratitude towards all stakeholders’ kind support and contribution all along.
On behalf of the Board of Directors
(Mr. Swake Srisuchart)
Chairman of the Board