chairman

Despite the forecast that the construction business in 2022-2024 will have an average growth of 4.5-5.5% per year, with key driving factors being the government’s large-scale investment projects and projects related to the development of the Eastern Economic Corridor (EEC), the investment in the private sector construction projects both for residential and commercial real estate projects still has not fully recovered, with the approximate growth of 3.0-3.5% in 2022, as seen from high competition among bidders that are medium-sized and major contractors both for private and public sector construction projects, ultimately leading to the tender price that may be lower than the expected target, coupled with the impact of the Russia-Ukraine war causing the increase in oil price. The costs of major construction materials such as steel, cement, concrete, copper wires, aluminum and building system installation equipment have risen exponentially, consequently affecting construction contractors’ operating results.

In 2022, the Company participated in several bid rounds for public and private sector construction projects, and won 10 of them, accounting for the value of 1.8 billion Baht, which is lower than the target, but due to the outstanding backlog from 2021 of over 10 billion Baht, the Company’s backlog at the beginning of 2023 was 15.7 billion Baht that will be realized in 2023 and the upcoming years, after the revenue of 7.84 billion Baht was realized in 2022. Besides, the Company also plans to participate in bid rounds of large-scale infrastructure projects with major construction contractors in Thailand and overseas, as well as the assignment of additional projects from major private sector organizations in 2022 valuing at 12.2 billion Baht.

The Company’s operating results in 2022 somehow missed the aspired target both in terms of revenue and profit, as well as the successes in winning the bid rounds for large-scale projects due to the reasons addressed earlier. Even though the backlog was in a good position, the revenue in 2022 increased by 7.8% from 7.63 billion Baht in 2021 to 8.23 billion Baht, though with lower gross profit from 8.5% in 2021 to 2.4% in 2022, due to an exponential increase in construction material costs. The Company reported the loss before income tax of 257.2 million Baht, compared to profit before income tax in 2021 of 144.4 million Baht. Though the financial cost and the loss from investment in joint venture decreased in 2022, the Company booked the loss for the period of 170.5 million Baht (equivalent to the loss per share of 0.13 Baht), compared to the profit of 125.9 million Baht in 2021 (equivalent to the earning per share of 0.09 Baht) in the consolidated statement of financial position. For the separate statement of financial position, the Company’s loss for the period was 195.9 million Baht (equivalent to the loss per share of 0.14 Baht), compared to the profit of 181.1 million Baht in 2021 (equivalent to the earning per share of 0.13 Baht).

The increased cost of major construction materials especially steel has significantly affected the Company’s cost. However, the situation improved in the end of 2022, and it was expected that this portion of the cost can be controlled in a more efficient manner in 2023 and 2024 compared to 2022, allowing the Company to make profit again.

In 2022, the Company’s total assets increased by 5.3% from 13.57 billion Baht in 2021 to 14.3 billion Baht in 2022, resulting from the increase in current assets of 6.7% from 11.23 billion Baht in 2021 to 11.98 billion Baht in 2022, mostly from the increase in account receivables and unbilled contractual costs, while cash and cash equivalents decreased from 815.8 million Baht in 2021 to 429.5 million Baht in 2022. Total liabilities increased by 8.4% from 10.85 billion Baht in 2021 to 11.77 billion Baht in 2022; most of them being current liabilities of 10.77 billion Baht (compared to 10.43 billion Baht in 2021), comprising of overdraft and short-term loan from financial institutions in the form of project financing amounting to 4.33 billion Baht, compared to 2.9 billion Baht in 2021. Non-current liabilities increased by 595.7 million Baht, which is the debenture with the validity of 2 years. Shareholders’ equity decreased from 2.72 billion Baht in 2021 to 2.52 billion Baht in 2022, resulting from the loss in the same year. Hence, the D/E ratio increased from 3.99x to 4.67x, while the gearing ratio increased from 1.25x in 2021 to 1.98x in 2022, which is in a similar range compared to other major construction contractors, and still in the level accepted by financial institutions and investors in general.

The Company appointed sub-committees to supervise operations in different areas under the good governance framework, with the monitoring of potential risks to be at the minimum, in order to be able to identify measures to rectify, improve and minimize risks in the Company’s transactions effectively.

The Company has improved operational procedures for enhanced efficiency and effectiveness, by devising departmental strategies to follow the ESG framework and emphasizing on environmental conservation both in the business premises, in terms of waste and pollution that may affect operators within the site, and surrounding communities. The focus is placed on safety and good environment, as well as the selection and utilization of materials that have the least impact on the environment, especially the contribution to reduce greenhouse gas emission (CO2). The waste sorting campaign has been launched in every construction site to promote recycling. The labors are encouraged to develop knowledge and competencies both in terms of construction techniques and system installation, which are important factors that promote quality of the work delivered to customers and to gain acceptance from the general public. The Company has always been prioritizing the importance of value chain, with the exchange of knowledge and work experiences, as well as provision of support in construction innovation and the use of new materials. The mentioned improvement continues to encourage the company’s sustainable growth.

The Company is well aware of the significance of all stakeholders in order to operate the business in a sustainable manner. Over the course of the past 30 years, support from customers, partners, the management, and staff members, as well as government institutes and private sector organizations, have been an important force that has helped the Company prosper and sustain. On this occasion, the Board of Directors hereby would like to extend our gratitude and appreciation towards all parties involved.

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Mr. Somprasong Boonyachai
Chairman of the Board of Directors
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Mr. Swake Srisuchart
Chairman of the Executive Committee
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