The directors have the pleasure in presenting the Company and its subsidiary’s annual report and audited financial statements for the year ended December 31, 2016.
Economy & Industry in 2016
In 2016, Thai economy ended up with a GDP growth of 3.2%, increasing from 2.8% in 2015 driven by the key factors of public investment, fiscal stimulus and tourism. Export performance in 2016 showed 0% growth but still improved from the negative growth of 5.53% in 2015, amid the world’s economic slowdown. However, the lack of consumer confidence decreased domestic spending due to the high household debt. In order to stimulate the inert economy, the Bank of Thailand exerted the monetary policy to maintain low policy interest rate at 1.50% throughout 2016.
For the automobile industry, new car sales in 2016 were 768,788 units, decreasing 3.9% from 799,632 units in 2015 due to economic slowdown. Also, non-one-ton pickup commercial vehicle sales in 2016 were 94,834 units, decreasing 15.09% from 111,694 units in 2015 for the same reason.
For leasing and factoring industries, SMEs still delayed the investments in machinery equipment and the additional requirement for working capital due to the lack of confidence in the future economy. As a result, the growth was almost flat.
Performance in 2016
On a consolidated basis, as of December 31, 2016, the Company recorded the total assets of THB 31,707 million, increasing 4.82% from THB 30,249 million at the end of year 2015 due to the portfolio growth from hire-purchase and leasing businesses. However, the total disbursement in 2016 was THB 20,091 million, decreasing 1.49% from THB 20,395 million in 2015 due to conservative credit policy for the short-term credit factoring business.
The total liabilities as of December 31, 2016 were THB 27,128 million, increasing 4.73% from THB 25,902 million at the end of 2015 to support the portfolio growth. The shareholders’ equity as of December 31, 2016 was THB 4,578 million, increasing 5.32% from THB 4,347 million at the end of 2015 resulting from the Company’s profit increase.
The total revenues in 2016 amounted to THB 2,816 million, increasing 3.45% from THB 2,722 million in 2015 resulting from the continuing growth of portfolio. The financial costs in 2016 amounted to THB 831 million, decreasing 8.11% from THB 904 million in 2015 due to the capability of decreasing the loan interest rate. The total operating expenses in 2016 amounted to THB 1,118 million increasing 15.88% from THB 964 million in 2015 mainly due to the reserve increase for doubtful accounts from declining customers’ payment ability. Consequently, the total profit for the year 2016 was recorded at THB 707 million, increasing 3.83% from THB 681 million in 2015.
The total portfolio in 2016 amounted to THB 31,671 million, increasing 5.29% from THB 30,079 million in 2015 due to the growth of business volume of long-term credits. The NPLs ratio at the end of 2016 was at 1.96% of the total portfolio and the allowance for doubtful accounts to NPLs ratio stood at 109.47% at the end of 2016, indicating asset quality is still under control.
Corporate Governance & Corporate Social Responsibility
The Board of Directors has adhered to corporate governance policy and corporate social responsibility to enhance efficiency, effectiveness, transparency, and assessability of the management for the confidence and long-term benefits to all shareholders, investors, stakeholders, society, and environment.
The Company engaged in the social activities to provide scholarships to students. In 2016, the Company received 98.75 score from the AGM Assessment Program of Listed Companies organized by the “Securities and Exchange Commission” in conjunction with the “Thai Investors Association”. In addition, the company received the announcement of the “Very Good” status from the last 5 years for the Corporate Governance Report of Thai Listed Companies 2016 published by the “Thai Institute of Directors Association”. Additionally, the company received the outstanding company performance award from the SET Awards 2016 for the SET market capitalization of THB 3bln. - THB 10 bln.
Business Prospect and Strategy In 2017
Thai GDP in 2017 is forecasted to grow 3.2% equivalent to that of 2016. The key factors to propel the growth are the government investments in the mega infrastructure projects, Eastern Economic Corridor (EEC) project, and the growth in tourism sector. Furthermore, private consumption is expected to improve due to the higher agricultural products prices. Besides, export is forecasted to expand by 1% - 3% due to the recovery of world economy and also the cross-border trades of AEC.
The domestic new car sales in 2017 are expected to slightly increase to 800,000 units from 768,788 units in 2016 due to released purchasing power from the end of locked period of first car buyer scheme. Moreover, continuing disbursement in the public investment projects by government will support the demand for construction vehicles and equipments and related transportation vehicles which in turn benefits our hire-purchase and leasing businesses.
The Company still pursues the opportunities from the cross-border trades of AEC. We continue to expand the market via opening new branches in gateway cities along the neighboring CLMV to grasp the transport link of border and transshipment trades.
Finally, the Company’s Board of Directors would like to convey heartfelt gratitude to shareholders, customers, creditors, and employees for their support and confidence.
For and on behalf of the Board of Directors.
Dr. Amnuay Viravan
Mr. Lo, Jun-Long
Chairman of the Board of Directors