Explanation and Analysis of the Financial Position and Performance
The Company and its subsidiaries have operated the business of Automotive manufacturing parts. The main income of the company group is from selling automotive parts such as Axle shaft, leaf spring, disc brake, drum brake, stabilizer bar, coil spring etc. The sale is for car maker manufacturer (Original - Equipment Manufacturer) in the country mostly.
Profit and loss analysis
In the year 2016 and 2015, the Company has total income of 8,397 million baht and 8,808 million baht (accordingly) which has decreased by 411 million baht or 5%. The net income from sale of goods and rendering of services for the year 2016 and 2015 is 8,299 million baht and 8,644 million baht (accordingly), decreased by 346 million baht or 4%. The overall automotive industry and agricultural machineries sector have been slow down because of negative factor from the economic and natural disaster. Main customer of the company is pickup car manufacturer, which its’ production volume decreased from last year.
Cost and expense Analysis
Selling and Service Cost
In the year 2016 and 2015, the company has the total selling and service cost of 7,062 million baht and 7,383 million baht (accordingly), decreased by 321 million baht or 4%; the rate of cost of sale and service sales in 2016 was 85% slightly lower than last year from the cost control measures in investment and the improvement in variable cost to align with the automotive industry.
The expense from selling and service
In the year 2016, the company has the expense in the selling and service of management for the amount of 670 million baht, decreased by 11 million baht or 2% mainly from closely monitoring in administration expense including expense relating to employee and man-power to align with the current situation of automotive industry.
Corporate Income Tax
In the year 2016, the company has corporate income tax for the amount of 48 million baht, increased 4 million baht or 10% mainly from profit management in line with granted privilege from the Board of Investment.
Profit from the work operation
The company’s operating profit, excluding share of profit from investment in associates, financial cost, and corporate income tax in 2016 in the amount of 665 million baht, decreased by 79 million baht from last year or 11% from decreasing in sale volume in some products of main customer.
The company’s net profit is the amount of 608 million baht, decreased by 34 million baht or 5% from the previous year, mainly from the decline in sales volume in some products of main customer.
Financial status analysis
The Company’s total assets according to the consolidated financial statement as at 31 December 2016 and as at 31 December 2015, is the amount of 9,421 million baht and 9,634 million baht (accordingly), decreased by 212 million baht or 2% mainly from decreasing of land, building and equipment due to write-off and depreciation.
The Company has net trade receivables as at 31 December 2016 for the amount of 1,331 million baht and 1,311 million baht for the net trade receivable as at 31 December 2015, increased by 21 million baht due to slightly increase of sale volume at the end of the year. The average debt collection period was 58 days.
According to the consolidated financial statements as at 31 December 2016, the Company’s net investment in related companies is the amount of 366 million baht. The investment was made in Yamada Somboon Co., Ltd., Tsuchiyoshi Somboon Coated Sand Co., Ltd., Nisshinbo Somboon Automotive Co., Ltd. and Somboon Somic Manufacturing Co., Ltd. The Company’s cost of investment in the afore-mentioned companies is for the amount of 73 million baht.
Land, Property and Equipment
The Company’s net land, property and equipment as at 31 December 2016 is for the amount of 5,410 million baht, and 5,705 million baht as at 31 December 2015, decreased by 295 million baht or 5% due to the depreciation on period for the amount of 798 million baht. The Company and subsidiaries has made additional investment total 508 million baht in Axle shaft production line to enhance production capacity for the future customer demand.
As at 31 December 2016, the Company’s total liabilities is 3,534 million baht. The short-term liabilities is 2,249 million baht and long-term liabilities is 1,286 million baht, decreased by 568 million baht or 14% from the previous year. The main decrease is from the paid-up investment to enhance production capacity of the plants. The liability from bank loans decrease by 483 million baht. During the year, the Company withdrew loan in the amount of 258 million baht and the Company repaid the longterm loan in the amount of 741 million baht.
Part of Shareholders
The Company’s shareholders’ equity as at 31 December 2016 is 5,887 million baht, increased by 356 million baht from the year ended 31 December 2015 of which the shareholders’ equity equal 5,531 million baht. This is the result of the interim operating profit.
The company’s profit appropriation in 2016 includes dividends for 2016 operating results at the rate of 0.60 baht per share, with the total of 255 million baht. The paid dividend is from the business that is supported by BOI in the whole amount. The interim dividends were paid on 2 September 2016 at the rate of 0.19 baht per share, or the total of 81 million baht. Thus, the remaining is at the rate of 0.41 baht per share, with the total of 174 million baht, would be paid to shareholders in May 2017.
The Company’s profit appropriation in 2015 includes dividends for 2015 operating results at the rate of 0.60 baht per share, with the total of 255.1 million baht. The paid dividend is from the business that is supported by BOI in the whole amount. The interim dividends were paid on 3 September 2015 at the rate of 0.20 baht per share, or the total of 85.0 million baht. Thus, the remaining is at the rate of 0.40 baht per share, with the total of 170.0 million baht, were paid to shareholders in May 2016.
As at 31 December 2016, the company’s capital structure consists of total liability for the amount of 3,534 million baht and the shareholders’ equity for the amount of 5,887 million baht; the debt-to-equity ratio is approximately 0.60 times.
Analysis of Cash Flow Statement
According to the consolidated financial statements as at 31 December 2016 and 31 December 2015, the company’s net cash inflow from operating activities is 1,442 million baht and 1,552 million baht (respectively). The company’s net cash outflow from investing activities is 554 million baht and 493 million baht (respectively).This is the result of the company and subsidiaries’ investment in Axle shaft production line, to enhance production capacity for the future customer demand. Cash outflow from financing activities is 817 million baht and 1,034 million baht (respectively), which is the result of the repaid longterm loan for investment project for the amount of 741 million baht and the total cash dividend paid for the amount of 251 million baht.
Main factors and influence that might affect the work operation or the financial position in the future
The overall automobile industry in 2016 does not achieve the target because buyers slowed down on new car purchase due to the political and the economic crisis. By including the household debt, agricultural product prices, the problem from the drought and the financial institutions must contain the considered in a loan. However, Thailand is still a manufacturing base for pick up in the export to the world. As a result, the Manufacturing Industry automobiles and parts are still the growth in the future, there are still many factors of the change and the development of the automotive industry in the future, such as the support of the government sector to drive the automotive industry and the parts to the Industry. 4.0 is supported, automobile manufacturing industry, and the parts to grow the support expansion of investment in the industry and the trend of change of Automotive Technology to the electric The selling volume of automobile in the country is 0.77 million cars while the export volume of automobiles is 1.19 million cars. In 2016, Thailand has remained as the base for pick-up car manufacture for worldwide export. As a result, the manufacturing of automobiles and parts continues to grow. In addition, the ASEAN Economic Community (AEC) will be another reinforcement that drives automobile and parts manufacturing because of the investment expansion in this industry. Due to such factors, in 2017 the Company will be ready for outside and inside factors to invests in new technology and machines, and have strategic planning to increase its market share in ASEAN market, invest in Research and Development to increase product value, and enhance production quality and engineering design to be cost competitive. and the impact as well as the business opportunity of the electric vehicle Concurrently, the Company has managed its human resources based on "Somboon Triple Bottom Line"for the sustainability.