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Investor Relations
Statement from the Chairman

During the year 2016, investments in real estate sector became stagnant due to high amount of household debt and reluctance of financial institutions on credit granting. As the purchasing power of the agriculture sector has not yet recovered, the construction material products are under fierce price competition. Accordingly, the Company has focused on the most effective cost management, resulting in better operating results in year 2016, which increased from the previous year by over 18.44 percent. Details of such management on various aspects are as follows:

Overall Operating Results:According to the consolidated financial statements of the Company and its subsidiary company (together referred to as the “Corporate Group”) had a total revenue in year 2016 of Baht 4,118.30 million, a slight decrease from the previous year of 1.12 percent, but the net profit was Baht 392.03 million, an increase of over 18.44 percent due to the following reasons.

  1. Reduction of production cost by improvement on production process, improvement on production efficiency of the secondary process, as well as utilization of Quality Control Circles (QCC) and Material Cost Improvement Program (MCIP), which are activities that have been conducted regularly to encourage and foster creative and innovative thinking among employees on production cost reduction. Although the production volume increased from the previous year by 1 percent, but the overall production cost decreased by 2.10 percent, resulting in an increase in gross profit from 25.87 percent in year 2015 to 26.60 percent in year 2016.
  2. Product distribution through projects, Modern Trade and export, especially to neighbouring CLMV countries with continuous growth in construction material industry, resulting in an increase in export sales volume of 4.39 percent.
  3. Development of new products that serve market requirements, including wood substitute products such as floor plank, decorative plank, and ventilation board as alternatives for real wood, which has become rare and expensive. Various reinforcement lightweight concrete (RLC) products have also been developed, such as diamond lintel and diamond kitchen counter as demanded by the market. Thus, the product mix has been increased with higher profit margin.
  4. Reduction of financial expenses and liquidity management expenses by which during year 2016, the Company had cash flow from operating results of Baht 710.22 million, which was sufficient for the dividend payment of Baht 278.43 million, as well as repayment of long term loan of Baht 287.50 million, resulting in a decrease in interest expenses from Baht 34.33 million in year 2015 to Baht 18.56 million in year 2016, or a decrease of 45.94 percent.
  5. The Company has sold an unused land in Surat Thani province, having a net profit of Baht 23.12 million from the sale of land after reduction of corporate income tax.

Share Repurchase for Financial Management Purposes
The Board of Directors of the Company has resolved to approve the Treasury Stock Program for financial management purposes with amount of the share repurchase not exceeding Baht 520 million for 100 million shares at the price of Baht 5.20 per share. When the Company has high retained earnings and good liquidity; that is,. having sufficient fund for investment on the Company’s shares itself, when the share price is undervalued and investment in the Company’s share will yield higher return than other types of investments. Moreover, it also serves as a tool for financial restructuring of the Company as the earnings per share (EPS) will increase with reduction of number of shares. In fact, the current share price of the Company has increased from the repurchase price.

Good Corporate Governance: As a listed company in the stock exchange since 2005, the Company is determined to become a leading organization with professional management giving precedence to the principles of Good Corporate Governance and strict compliance with practices as stipulated by the Stock Exchange of Thailand and the Securities and Exchange Commission (SEC), having received the following awards of pride.

  1. The Company was placed in the “Excellent” group with a five-star award ( DRT Five-star award )for the assessment of Corporate Governance and ranked in the Top Quartile level within the group of companies with market capitalization of Baht 3,000 million to Baht 9,999 million, having received a score of 90 percent in year 2016, which is the same as year 2015, according to the assessment criteria and scoring procedure that are more in line with the ASEAN CG Scorecard (ACGS).
  2. The Company received the AGM Assessment Award, having received a full 100-score (“Excellent”) from the Thai Investors Association (TIA) for the 6th consecutive year from year 2011 to 2016.

Corporate Social Responsibility (CSR):The Company recognizes the importance of environmental responsibility and has emphasized on the improvement of manufacturing process to become environmental friendly by implementing projects this year, including the reduction of dust and air pollution, reduction of coating loss, and use of raw material residue and excess materials for recycling into other products, products processing and energy management projects, etc., as well as organization of several energy related activities and booth exhibitions in order to promote energy conservation consciousness for sustainable and successful business operation. Additionally, the Company has been ESG 100 certified, approved as the member of the Private Sector Collective Action Coalition Against Corruption (CAC), and become the Partnership Against Corruption for Thailand (PACT Network) with the Thaipat Institute.

Regarding training on corporate social responsibility and sustainable development, in year 2016 the Company’s executives were assigned to attend all seven courses promoting CSR related skills. The Company’s executives also participated in “Human Rights in Community Promotion” activity, held the “Promotion of Child-Friendly Business Operation” activity and “Promotion of Age-Friendly Business Operation” activity with Thaipat Institute, etc.

Dividend Payment Year 2016: According to the Company’s separate financial statements of year 2016, the net profit was Baht 392.28 million or Baht 0.39 per share from a par value of Baht 1.00 per share. The Board of Directors, therefore, has proposed to appropriate the earnings for dividend payment at Baht 0.30 per share to the shareholders. Accordingly, the Company had already paid the interim dividend of Baht 0.15 per share on September 9, 2016. Therefore, the remaining dividend of Baht 0.15 per share or 76.92 percent of the net earnings per share in 2016, which will be paid out on May 19, 2017, which is considered quite a high rate of dividend payment ratio in order to continue providing good return to the shareholders as for the past several years.

Future Trend: Thai economy in year 2017 is expected to gradually recover. Property development companies are launching new projects, while the government sector has started investing in infrastructure and launched assistance measures for agricultural sector, which should result in higher purchasing power. Additionally, with the fuel price remaining at low level and weakening Thai Baht currency, export market should be improved with anticipation of better construction material market.

The Board of Directors would like to extend its thanks and appreciation to the shareholders, business partners and all related parties for the continued support that has enabled the Company to respectively attain success and progress thus far.

Mr. Prakit Pradipasen
Chairman of the Board