Statement of Comprehensive Income
In 2015, the company suffered losses in performance due to overall economic stagnation. Investments in various government and private sector projects did not achieve the original expectation to begin latest in mid-2015 and were delayed, which affected the company’s business, especially machinery sales. The significant drops in oil prices impacted the oil and petrochemical industries, which are the primary business group for which the company provides machinery rental services. Although electricity businesses have higher machine rental demands, the need is insufficient. Consequently, the company’s total income was less than 2014 by 19 percent, a reduction in both machinery sales and service income with a sales-to-service income ratio of 40 : 60 in 2015.
The company is confident in its ability to return to positive performance in 2016 with readiness in machinery where previous investments and public sector investment projects should begin to arrive periodically. This will result in greater demand for machinery. The fact that the company is the exclusive dealer for XCMG cranes, the largest manufacturer of heavy construction machinery in the People’s Republic of China and the world’s fifth largest (the company cancelled sales representation for ZOOMLION cranes in 2015). The fact that XCMG is ready to support and stay in close cooperation with the company will help enhance competition efficiency in terms of both products and post-sale services. Furthermore, the company will increase income bases in 2016 from foundation work businesses such as increased sales and rental services for construction machinery used in construction work such as drilling rigs, wall grabs and etc.
Statement of Financial Status
As of 31 December 2015, the company’s shareholders’ equity was valued at 1,358.62 million baht, a reduction from 1,413.02 million baht in 2014 by 54.40 million baht or 3.85 percent as a result of reductions in retained earnings from net performance losses in 2015.
The company’s liquidity ratio has been declined from 1.06 in 2014 to 0.75 in 2015. Revenues from sales and services were underachieved, and the company has invested in new machines, thus requiring loan from financial institutions. Cash flow gained from operating activities was 72.3 million baht, cash flow spent for investing activities was 75.8 million baht, and cash flow spent for fund raising was 3.2 million baht. Therefore, cash and cash equivalents in business at the end of accounting period were 10.5 million baht, and Debt to Equity ratio increased from 0.93 in 2014 to 1.05 in 2015. Economic climate in 2016 is expected to be recovered; government’s projects delayed from 2015 can be likely to be implemented by latest mid 2016, which include wind turbine installation that started since end 2015 and planned to proceed throughout 2016. Company plans to focus more on foundation works which are able to support turnover of the company in terms of revenues from sales and services. Moreover, the company plans to rapidly release remaining stock to improve liquidity.