MD & A

Archive : Management's Discussion and Analysis.

Management’s Discussion and Analysis (MD&A) for 3 months and full year ended
31 March 2019

Key summary of 1Q19

  • Net profit - In 1Q19, net profit amounted to Baht 760 million, slightly dropped by 0.2%, mainly from decrease in share of profit of associates from booking of one-off tax expenses of indirect associate in Vietnam amounted to Baht 34.1 million (details in Note 7 of financial statement). Net profit excluding one-off item increased by 4.2% from 1Q18.
  • Total revenue - In 1Q19, total revenue reported to Baht 7,898 million, increased by 4.4%, mainly from contribution of new stores as well as higher rental income from both existing and new stores.

Note: Adoption of TFRS 15 mainly results in booking of gross profit instead of sales and COGS for products sold under consignment terms. However, there is no impact on the net profit from such accounting change. Details of which are disclosed in Note 3 of the Company’s financial statement in 1Q19.

Summary of income statement for the 3-month period ended 31 March 2019 and 31 March 2018 (Consolidated)

Unit : Million Baht
Consolidated financial statement
1Q19
1Q18
Increase
(Decrease)
% Change
Revenue from sales of goods 2,982 2,823 159 5.6%
(Total sales) 6,646 6,457 188 2.9%
Rental income 990 889 102 11.4%
Investment income 7 4 3 68.3%
Other income 256 215 41 18.9%
Net revenue 4,235 3,931 304 7.7%
(Total revenue) 7,898 7,565 333 4.4%
Cost of sales of goods 1,386 1,210 176 14.5%
Selling expenses 1,598 1,525 72 4.8%
Administrative expenses 390 351 39 11.2%
Finance costs 5 12 (7) (60.9%)
Total expenses 3,378 3,098 280 9.0%
Share of profit of associates 103 131 (28) (21.5%)
Profit before income tax expense 959 964 (5) (0.5%)
Income tax expense 161 155 6 3.7%
Net profit 760 762 (2) (0.2%)

Financial performance in 1Q19

  • Total sales increased by Baht 188 million or 2.9% from 1Q18 to Baht 6,646 million in 1Q19, mainly from contribution of existing and new stores and ongoing improvement of product assortment as well as the promotional activities to stimulate customer spending.
  • Rental income was reported at Baht 990 million, increased by Baht 102 million or 11.4% from 1Q18. The solid growth was driven by the growth of existing and new lifestyle centers in last year. The average occupancy rate maintained at 99%.
  • Total revenue was Baht 7,898 million, increased by Baht 333 million or 4.4% from 1Q18, mainly from sales, rental income and other income growth.
  • Gross profit decreased by Baht 17 million or 1.1% from 1Q18 to Baht 1,596 million in 1Q19. The gross profit margin* was at 24.0%, declined by 1.0 % from 1Q18, mainly resulted from more promotional campaigns to stimulate customer spending.
    Note: *Gross profit margin = (Revenue from sales of goods – Cost of sales of goods) / Total sales
  • Selling and administrative expenses amounted to Baht 1,988 million, increased by Baht 112 million or 6.0% from 1Q18, mainly from expenses of new stores.
  • Finance costs decreased by Baht 7 million or 60.9% from 1Q18 to Baht 5 million in 1Q19, resulting from loans repayment.
  • Share of profit of associates was Baht 103 million, decreased by Baht 28 million or 21.5% from 1Q18 from booking of one-off tax expenses of indirect associate in Vietnam amounted to Baht 34.1 million (details in Note 7 of financial statement).
  • Income tax expense amounted to Baht 161 million, increased by Baht 6 million or 3.7% from 1Q18.
  • Net profit reported at Baht 760 million, slightly dropped by 0.2%, mainly from decrease in share of profit of associates from booking of one-off tax expenses of indirect associate in Vietnam amounted to Baht 34.1 million. Net profit excluding one-off item increased by 4.2% from 1Q18.

Summary of statement of financial position as of 31 March 2019 and 31 December 2018 (Consolidated)

Unit: Million Baht
Financial position
31-Mar-19
31-Dec-182
Increase
(Decrease)
% Change
Cash and cash equivalents 1,544 1,894 (350) (18.5%)
Trade accounts receivable 563 541 22 4.1%
Inventories 2,310 2,241 69 3.1%
Other current assets 679 864 (185) (21.4%)
Fixed assets1 17,738 17,913 (175) (1.0%)
Other non-current assets 4,992 4,933 59 1.2%
Total assets 27,825 28,386 (561) (2.0%)
Trade accounts payable 4,520 5,229 (709) (13.6%)
Short-term loans & current portion of long-term loans 364 565 (201) (35.5%)
Other current liabilities 1,794 2,249 (455) (20.2%)
Long-term loans 97 109 (12) (11.2%)
Other non-current liabilities 1,431 1,411 21 1.5%
Total liabilities 8,207 9,563 (1,356) (14.2%)
Total equity 19,618 18,822 796 4.2%
Total liabilities and equity 27,825 28,386 (561) (2.0%)

Note:
1 Fixed assets include investment properties, property, plant and equipment, and leasehold rights
2 Reclassification of some accounts as disclosed in Note 17 of the Company’s financial statement in 1Q19

As of 31 March 2019, total assets amounted to Baht 27,825 million, decreased by Baht 561 million or 2.0% from the end of 2018 mainly from decrease in cash, other receivable and fixed assets. Total liabilities amounted to Baht 8,207 million, decreased by Baht 1,356 million or 14.2% from the end of 2018, mainly from payment of trade and other payable as well as loan repayment. Total equity was Baht 19,618 million, increased by Baht 796 million or 4.2%.

Capital Structure

As of 31 March 2019, the Company's capital structure comprised of total liabilities of Baht 8,207 million, which included interest-bearing debt Baht 462 million, and total shareholders' equity totaled Baht 19,618 million. Total liabilities to equity ratio of 0.4 times, while interest-bearing debt to equity ratio was at 0.02 times.