97
MANAGEMENT DISCUSSION AND ANALYSIS
1. Operating Results 1) The Company’s Gross Profit amounted to Baht 631.79 million, an Baht 83.43 million Baht or 15.21% increase from 2009. • Revenue from Sales of Baht 3,229.27 was an increase of Baht 478.25 million or 17.38%, resulting from an increase in sales volume from continuous implementation of sales promotional and marketing activities throughout the year. • Cost of Sales was Baht 2,597.48 million, an increase of Baht 394.82 million or 17.92%, in line with an increase in sales volume. However, Cost of Sales increased at a higher rate than Revenue from Sales, as a result of larger purchase volume of PET products for reselling. The purchasing cost combined with transportation cost was higher than the Company’s production cost of the same product. 2) Sales support income from business partner in the amount of Baht 277.29 million, was an increase of Baht 47.01 million or 20.41%. The purpose of this income was to provide support to the Company’s marketing activities and stimulate sales volume. 3) Other incomes of Baht 21.63 million showed a decline of Baht 1.49 million or 6.43%. 4) Selling and Administrative Expenses amounted to Baht 830.05 million, an increase of Baht 89.75 million or 12.12%, due to an increase in transportation expenses as a result of a rise in gasoline price; an increase in sales promotion and marketing expenses to stimulate sales volume; and an increase in employees’ compensations, resulting from the adjustment of the annual compensation rate. 5) Finance Cost was Baht 6.60 million, an increase of Baht 0.38 million or 6.07%. 6) Corporate Income Tax amounted to Baht 18.81 million, was an increase of Baht 8.46 million or 81.79%, as a result of an increase in profits for the year. 7) The Company’s Net Profit was Baht 75.26 million or Baht 0.45 per share. Net Profit increased by Baht 30.36 million or 67.64% from 2009. Profitability Ratios: Ratio
2010
2009
Gross Profit Margin (%)
19.56
19.93
Operating Profit-to-Sales Ratio (%)
2.25
1.35
Net Profit-to-Sales Ratio (%)
2.33
1.63
Return on Shareholders (%)
6.72
4.56
• Gross Profit Margin declined by 0.37%, as a result of an increase in the cost of products purchased for reselling purpose, as already mentioned above. • Operating Profit-to-Sales Ratio increased by 0.90% and Net Profit-to-Sales Ratio increased by 0.70%, resulting from the changes in income and expenses as already indicated. • Return on Shareholders increased by 2.16% as a result of an increase in Net Profit for the year.