The impact of the transmission of COVID-19 since 2019 and the entire 2020 has clearly affected the global and the Thai economy. The construction and real estate development businesses in Thailand have been directly impacted, with a tangible decline in the investment and private sector construction projects. However, the construction of the government’s large-scale infrastructure projects is still being continuously executed, despite delays from the original plan. Given that, construction contractors of all sizes; large, medium and small, have been forced into intense competition to win the bidding of different government projects. Nevertheless, the construction industry outlook for government projects in 2021-2022 is likely to grow by 6-7%, with the total project value of 700,000-800,000 million Baht, while the growth of the private sector construction is likely to increase by 4-5%, with the total project value of 400,000-500,000 million Baht.

In 2020, the Company participated in the bidding of several large-scale projects; both the government and private sector projects, and won 18 projects in total, valuing 14.4 billion Baht. The government’s projects account for 12.9 billion Baht; equivalent to 90.6% of the new projects acquired in 2020. There are a number of significant projects, for instance, Block 33 belonging to the Property Management of Chulalongkorn University, valuing of 2.8 billion Baht; Government Complex, Ministry of Interior project, valuing 5.2 billion Baht; and the Office Building 2 construction project of Airports of Thailand PCL, valuing 1.9 billion Baht. The aforementioned projects have resulted in the Company’s backlog at the beginning of 2021 of 22.8 billion Baht, which will be realized in 2021 and the following years.

With regards to the operating performance in 2020, the Company’s total assets increased by 11.8% from 10.6 billion Baht in 2019 to 11.8 billion Baht in 2020, from the increase in assets and revaluation of property, plant and equipment from 163.3 million Baht in 2019 to 779.9 million Baht in 2020, to reflect the true asset value. Meanwhile, liabilities increased by 16.2% from 8.04 billion Baht to 9.34 billion Baht, from the 16.7% increase in current liabilities from 7.34 billion Baht in 2019 to 8.57 billion Baht in 2020. The majority of which was due to the increase in construction costs that were not yet due and debentures, while accounts payable and loans from financial institutions have decreased. The shareholders’ equity slightly decreased from 2.56 billion Baht in 2019 to 2.51 billion Baht in 2020.

he revenue in 2020 declined by 8.7% from 9.61 billion Baht in 2019 to 8.77 billion Baht in 2020, with the gross profit of only 1.1%, which is lower than that of 2019 at 8.5%, mainly impacted by the COVID-19 situation that has caused labor cost and construction material cost to increase, while revenue did not meet the target, despite the fact that the Company managed to reduce selling and administrative expenses by 16.1% from 657 million Baht in 2019 to 551 million Baht in 2020. In 2020, there was an issuance of short-term debentures totaling 420.5 million Baht for high net worth investors, which has contributed to enhance liquidity, despite the increase in the interest burden brought with it. Even though the loss of 441.5 million Baht was reported in the consolidated statement of financial position, the profit from the revaluation of assets amounting to 487.1 million Baht has resulted in the profit for the period of 48.27 million Baht, preventing the shareholders’ equity from getting significantly affected by the loss. The D/E ratio stood at 3.7x, which is still acceptable among financial institutions, suppliers and investors to continue providing support to the Company. The Company has received credit facilities from a number of financial institutions, totaling 35.7 billion Baht to support business operations, together with favorable credit terms from suppliers. Despite the decrease in the ending cash from 178.6 million Baht in 2019 to 124 million Baht in 2020, the Company has had sufficient liquidity to operate the business and materialize growth.

It is of utmost urgency for the Company to improve work processes for higher effectiveness and efficiency, as well as to control costs and quality to satisfy customers. Developing human capital, building teams and motivation among staff members, pushing works at hand to achieve goals in all aspects to create values for all stakeholders are the Company’s priorities, on the basis of corporate governance (CG), with an awareness of an ESG principle in operating the business throughout the value chain.

The Company would like to express gratitude towards customers, suppliers, staff members, government and private sector organizations for being the key factors in helping the Company succeed with consistency over the past 30 years. The Board of Directors hereby would like to assure that the Company’s business will continue to progress and prosper in the long run.

Yours sincerely,
(Mr. Swake Srisuchart)
Chairman of the Board
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