Financial Analysis and Business Operation Results Overview of Business Operation Results In the face of economic downturn since the end of 2008 along with the effects from the world economic crisis, the H1N1 flu outbreak, continuing political conflicts and demonstration, as well as violence situation in the three southern border provinces, had sharply decelerated the economy in 2009. The overall retail and wholesale business in the first half of 2009 contracted due to the slowdown of consumer spending in almost every product category, except for the goods in food section. For the second half of the year, the overall domestic economy adjusted in a better direction. The important factors came from the government’s economic stimulus measures which resulted in the increase in consumer purchasing power and the improvement of spendings in the retail and wholesale business accordingly. The Company, however, has closely kept abreast of the economic and political situation in order to plan and find measures and strategies to prevent the risks that may occur, and to operate the business so as to successfully reach the planned target. For the Company operation result in 2009, sales, total revenues and net profit are still growing from the previous year due to many driving factors such as an increase in the number of branches, same store sales growth, sales of new stores, efficiency of inventory management, revenues from space rental business, and revenues from HomePro Expo etc.
Operating Result
Comparing the results of operation for the year ended 31st December 2009 to the same period of year 2008.
1. Revenue from Sales
In 2009, the Company and its subsidiary generated revenue from sales of Baht 20,329.12 million, increased from the previous year by Baht 1,788.84 million or 9.65%. The increase was mainly driven by the same store sales growth, sales of the newly opened branches during 2008 to 2009, and sales from HomePro EXPO in the 1st and 4th quarter of the year.
2. Other Revenues
In 2009, the Company and its subsidiary generated other revenues of Baht 1,469.97 million, increased from 2008 by Baht 186.06 million or 14.49%, from the following transactions: • Revenue from rental and service, increased by Baht 74.12 million, from space rental revenue of HomePro Village branch and HomePro EXPO No. 9 and 10. • Other Revenues, increased by Baht 111.94 million, revenue from advertising fee, support fee of promotional activities from business partners, service fee related to sales of goods and other revenues of its subsidiary.
3. Cost of Sales and Gross Profit Margin
In 2009, the Company and its subsidiary had the cost of sales of Baht 15,395.07 million, increased from the previous year by 1,248.34 million or 8.82%, which was the result of the increase of sales. The Company had gross profit of Baht 4,936.10 million, increased from the previous year of Baht 540.87 million. The gross profit margin as percent to sales was 24.28%, moved up from the previous year of 23.71%.
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