The directors have the pleasure in presenting the Company and its subsidiaries’ annual report and audited financial statements for the year ended December 31, 2017.
Economy & Industry in 2017
In 2017, Thai economy ended up with a GDP growth of 3.8% increasing from 3.2% in 2016. The expansion was driven by exports, tourism, and private investment. Export performance in 2017 shown a big improvement with the highest growth in the last 6 years at 10% comparing to the previous year. The export growth was driven by the overall world’s economic recovery. However, the weak consumer confidence and the high level of household debt slowed down the pace of the domestic spending. In order to stimulate the economy, the Bank of Thailand has maintained low policy interest rate at 1.50% since April 2015.
For the automobile industry, new car sales in 2017 were 871,650 units, increasing 13.38% from 768,788 units in 2016 due to the first-time car buyer scheme unlocked and public mega projects. Also, non-one-ton pickup commercial vehicle sales in 2017 were 101,118 units, increasing 6.63% from 94,834 units in 2016 because of public investment.
Most SMEs still lacked of confidence in the future economy. For leasing and factoring industries, SMEs’ investments in machinery equipment and the additional requirement for working capital remained inactive.
Performance in 2017
On a consolidated basis, as of December 31, 2017, the Company recorded the total assets of THB 33,999 million, increasing 7.23% from THB 31,707 million at the end of year 2016 due to the portfolio growth. However, the total disbursements in 2017 were THB 19,372 million, decreasing 3.58% from THB 20,091 million in 2016 due to stringent credit policy for the short-term working capital factoring business.
The total liabilities as of December 31, 2017 were THB 29,168 million, increasing 7.52% from THB 27,128 million at the end of 2016 to support the portfolio growth. The shareholders’ equity as of December 31, 2017 was THB 4,831 million, increasing 5.52% from THB 4,578 million at the end of 2016 resulting from the Company’s profit increase. The Company has the paid-up capital at THB 1,759 million with the retained earnings of THB 2,352 million.
The total revenues in 2017 amounted to THB 2,933 million, increasing 4.17% from THB 2,816 million in 2016 resulting from the continuing growth of portfolio. The financial costs in 2017 amounted to THB 772 million, decreasing 7.06% from THB 831 million in 2016 due to the capability of decreasing the loan interest rate. The total operating expenses in 2017 amounted to THB 1,241 million increasing 11.07% from THB 1,118 million in 2016 mainly due to the increasing of reserve for doubtful accounts. Consequently, the total profit for the year 2017 was recorded at THB 745 million, increasing 5.43% from THB 707 million in 2016.
The total portfolio in 2017 amounted to THB 33,742 million, increasing 6.48% from THB 31,671 million in 2016 due to the growth of business volume. The NPLs ratio at the end of 2017 was at 2.51% of the total portfolio and the allowance for doubtful accounts to NPLs ratio stood at 99.0% at the end of 2017, 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 2017, the Company received 98.00 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 6 years for the Corporate Governance Report of Thai Listed Companies 2017 published by the “Thai Institute of Directors Association”. Additionally, the company received the Approval of certified membership of Thailand’s Private Sector Collective Action Coalition against Corruption (CAC) from the Thailand’s Private Sector Collective Action Coalition against Corruption Council.
Business Prospect and Strategy In 2018
Thai GDP in 2018 is forecasted to grow 3.9 - 4.2% slightly improved from 2017. The key driving factors from the government are the investments in the transportation infrastructure projects and the Eastern Economic Corridor (EEC) project. Meanwhile another driving factor is from tourism. Besides, export is forecasted to expand by 4 - 6% due to the recovery of world economy, higher oil-related products, and the cross-border trades of AEC. Moreover, private consumption is expected to improve due to the higher agricultural products prices.
The domestic new car sales in 2018 are expected to increase to 900,000 units from 871,650 units in 2017 due to the rising demands from the first-time car buyer scheme unlocked. Furthermore, the government’s increasing disbursements in the public investment for the mega projects will support the demands for construction vehicles and equipments and related transportation vehicles. As a result, our hire-purchase and leasing businesses can earn the benefit.
The Company still pursues the opportunities from the cross-border trades of AEC. We will keep on expanding the market via opening new branches in gateway cities along the neighboring CLMV to grasp the transport link of border and transshipment trades. Meanwhile, we continue to grab the opportunities from the government mega projects which can also help us grow the business.
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