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Investor Relations
Statement from the Chairman

In year 2017, regional market and agricultural sector remain unrecovered, resulting in stagnant residential market overall. The Company thus has actively engaged with modern construction material outlets (modern trade), which has been continuously expanding. Moreover, consumer behavior is changing and many prefer buying construction materials from modern trade due to its convenience and complete selection. The Company also engaged with construction projects of both public and private sectors. According to the operating results in year 2017, the profit has increased from the previous year by 4.99 percent, which is deemed satisfactory.

Overall Operating Results :In year 2017, the total revenue was Baht 4,171.13 million, a slight increase from the previous year by 1.28 percent. The net profit was Baht 411.61 million, an increase from the previous year by 4.99 percent. The management in the previous year was as follows:

  1. Production cost management by improvement on production processes and production efficiency, resulting in lower production cost, with profit margin increased from 27.78 percent in year 2016 to 28.46 percent in year 2017 as follows:
    • Increasing production capacity by improving NT-9 production line by increasing products in autoclave machine by 20 percent, and improving production efficiency of NT-10 production line by 14 percent.
    • Decreasing production cost by optimizing the production of colored tiles and colored siding boards, which decreased the production cost by 4.6 percent; improving the production efficiency of secondary process product group, decreasing the production cost by 0.6 percent; arranging various programs including quality control circle (QCC) and material cost improvement program (MCIP) to promote innovative thinking regarding production cost reduction among employees.
  2. Production distribution through modern trade, which has been continuously expanding last year, as well as projects and export market. The production distribution through modern trade increased by 19.54 percent from the previous year, through projects by 10.46 percent, and through export market by 2.05 percent.
  3. Development of new products that serve market requirements, including realistic synthetic wood or siding board colors, grooved gray siding boards with homogenous color, lap siding, T-Lock wood flooring which reduces nail works, and 2-in-1 eaves, etc. This is to add value to exterior and interior decorative products, as well as improving the wood quality for increased competitiveness and variety of color for roofing tiles and synthetic wood or siding boards. Additionally, improvement has been made on color quality to enhance sheen, durability, and reducing production cost.
  4. Regarding financial management in year 2017, the Company’s liquidity is considered good, with cash flow from operating results of Baht 822.45 million, which was sufficient for the dividend payment of Baht 312.83 million, long-term and short-term loan repayment of Baht 393 million, resulting in a decrease in interest expense from Baht 18.56 million in year 2016 to Baht 12.58 million in year 2017, or a decrease of 32.21 percent; and a decrease in debt to equity ratio from 0.71 in year 2016 to 0.51 in year 2017, or a decrease of 28.17 percent.

Share Repurchase for Financial Management Purposes : The Board of Directors has resolved to approve the Treasury Stock Program of 100 million shares, with the amount of the share repurchase not exceeding Baht 520 million, or 9.54 percent of all paid-up capital. The repurchase is for financial management purposes since the Company possesses low debt, with adequate retained earnings and liquidity. The share repurchase had the shares resale period from January 1 to December 31, 2017. Since the financial status of the Company did not differ from expectation, the Board of Directors thus resolved not to reoffer the treasury stock.
After the end of the reoffering period, the Board of Directors has considered that the Company’s capital after the share repurchase was adequate for the current amount of transaction of the Company, and sufficient for business expansion in the future. Therefore, on January 29, 2018, the Board of Directors has resolved to propose the shareholders’ meeting to approve the reduction of registered capital of the Company at the amount equal to the share repurchase. The reduction of the registered capital would be beneficial to shareholders, since it would increase the return on equity, earnings per share, and dividend yield.

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 in year 2017.

  1. The Company was presented with “Thailand Sustainability Investment (THIS) 2017” award from the Stock Exchange of Thailand and Money&Banking Magazine. The award was for listed companies with sustainable business practice that consider the Environment, Society, and Governance (ESG).
  2. The Company received a five-star award for the assessment of corporate governance among Thai listed companies year 2017, in which the Company received 91% score and was placed in the “Excellent” group, 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.
  3. The Company received a four-star award for the annual general meeting (AGM) quality assessment of the listed companies year 2017, in which the Company received 97% score and was placed in the “Very Good” group.

Corporate Social Responsibility (CSR) :The Company recognizes the importance of societal and environmental responsibility and has continuously emphasized on the improvement of manufacturing process to minimize environmental impacts. Focus has been placed on water and waste management, dust reduction, odor elimination, as well as reduction of greenhouse gases which contributed to global warming and climate change. As a result, less energy is used in the production process, as well as the reduction of chemicals or coolant, which could impact the ozone layer.

Appropriate The Earnings : According to the Company’s separate financial statements of year 2017, the net profit was Baht 408.32 million or Baht 0.43 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 0.36 per share to the shareholders. Accordingly, the Company had already paid the interim dividend of Baht 0.18 per share on September 29, 2017. Therefore, the remaining dividend of Baht 0.18 per share or 83.72 percent of the net earnings per share, which will be paid out on May 18, 2018, 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: The economy in year 2018 is expected to recover. Modern construction material outlets or modern trade will continue to expand, and new real estate projects should increase. With continuous investment on utility infrastructure by the government, along with the recovered regional market and agricultural sector, the operating results of the Company in year 2018 should be improved. The business of the Company is expected to grow continuously, despite potential increase in fuel price and labor cost.

The Board of Directors would like to extend its thanks and appreciation to the shareholders 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