Operating Performance

The overall Thai economy in 2019 grew at 2.4% due to the global economic slowdown, uncertainties of trade barriers and the appreciation of the baht. These caused a decrease in the industrial sector and a negative value of exports. The IT market at the end of the year was still stable. The enterprise software market was, however, the fastest growing market this year. As a result, the Company’s revenue from product sales and services in 2019 was at 7,402 million baht, a decrease of 7% from the hardware products and office supplies groups.

In addition, the Company has a policy to focus on selling high-standard products and service. Therefore, the Company’s gross profit margin has been increased from the previous year and the Company had a net profit of 220 million baht, representing a decrease of 22%.

– Revenue

The Company has revenue from the sale of products and rendering of services divided into:

  • Digital Solutions Group (DSG): The revenue was 2,153 million baht, accounting for 29%, a decrease of 25% from the previous year due to a decrease in the sales of medium-sized computers and large-sized storage devices. Due to the economic downturn, the private sector investing in the large-scale projects has slowed down the purchase of hardware products compared to the year 2018.
  • Solutions Integration Group (SIG): The revenue was 3,475 million baht, accounting for 47%, an increase of 8% from the previous year due to an increasing sales in the network, Application Software Infrastructure and Software License products.
  • Digital Printing Group (DPG), The revenue was 1,774 million baht, accounting for 24%, a decrease of 6% compared to the previous year. Since many organizations had measures to control the budget for the purchase of supplies, the overall income of the products mentioned above was decreased in this year.

The gross profit margin was higher than to the figure of 2018, which has a gross profit margin of 15.8%, while the year 2019 was 16.3% due to the Company still focused on selling the high-standard products, service providing and changing the sales method of consumable products to long-term purchase contracts.

– Expenses

The Company’s expenses consist of:

  • The selling and administrative expenses increased from the previous year by 27 million baht, when compared to the revenue from the sale of products and rendering of services in 2019, representing 13.5%, an increase compared to 12.2% in 2018. The increase was mainly due to the reserve of employee benefits of 45 million baht and the company had reversal of provision for doubtful debts in the amount of 31.4 million baht due to the civil court gave judgement for the company won a lawsuit. Nevertheless, these expenses did not negatively affect the operating cash flow of the company.
  • The financial cost was decreased from the previous year by 5 million baht, when compared to the revenue from the sale of products and services in 2019 at 0.18%, which was close to 0.23% in 2018.
  • The income tax was decreased by 13 million baht due to a decrease in the profit before tax in 2018, when compared to the revenue from the sales of products and services in 2019 at 0.7% which was close to 0.8% in 2018.

As a result, the profit of the company was 220 million baht, compared to 283 million baht in 2018, a decrease of 63 million baht or 22%. The main reason was due to a decrease in sales of 572 million baht, resulting in a decrease in gross profit of 47 million baht.

Regarding the profitability ratio, the Company had a net profit margin of 2.9%, a decrease from 3.5% in the previous year. The equity ratio was decreased at 11.7%, compared to 15.7% in the previous year.

Financial Status

– Assets

As at the end of year 2019, the Company had total assets of 3,282 million baht, a decrease of 228 million baht from year 2018.The total assets consisted of the current assets of 2,255 million baht or 69% of the total assets, and non-current assets of 1,027 million baht or 31% of the total assets. The main reasons for the asset decrease were as follows:

  • The current assets of 2,255 million baht decreased by 195 million baht derived from a decrease in trade and other current receivables after deducted allowance for doubtful accounts of 350 million baht,a decrease in inventories of 46 million baht, a decrease in current portion of finance lease receivables of 23 million baht, a decrease in cash and cash equivalent of 12 million baht, and decrease in other current assets of 1 million baht. As for an increase in current investments of 238 million baht from the capital invested by the Company in money market fund.

– Trade and Other Accounts Receivables

The Company’s trade receivables after deducting allowance for doubtful accounts at the end of year 2019 were 1,000 million baht, a decrease of 361 million baht from last year. Most accounts receivable at the rate of 80% are accounts receivable that are not yet due. The remaining 20% ​​of the receivables are in the process of payment tracking.There was accounts receivable with unpaid debts in excess of 1 year in the amount of 0.4 million baht and this category of debtors is under the legal proceeding for the amount of 38 million baht which are the debtors who are paying the debt installation and under the process of debt collection.  The Company considered the allowance for doubtful accounts in accordance with the status of each debtor in accordance with the criteria set by the Company to assess the quality of the debtors.In 2019, the Company has set up an allowance for doubtful accounts equal to 6 million baht, amounting to 6% of total receivables. The Company has an average collection period in 2019 of 60 days, while unbilled trade receivables at the end of 2019 were 157 million baht, a decrease of 35 million baht.

Other receivables at the end of 2019 were 164 million baht, an increase of 46 million baht. Most of receivables were prepaid expenses.

– Inventories

The Company has inventories after deducting allowance for diminution in value of goods at the end of 2019 equals to 401 million baht, a decrease of 46 million baht. The inventories can be divided into finished goods, work in progress and goods in transit. The average sales period is 24 days in accordance with the management policy to control and prevent the risk of the Company.

The non-current assets were 1,027 million baht, a decrease of 34 million baht due to a decrease in the value of property, plant and equipment(net) by 60 million baht, a decrease in the finance lease receivables  by 2 million baht, a decrease in the deposit at financial institutions used as collaterals by 2 million baht, an increase in the deducted at source by 18 million baht, an increase in the deferred tax assets by 7 million baht, an increase in the intangible assets by 4 million baht and a increase of the investment in associated from share of profit at 1 million baht. The Company had a return on the fixed assets at 41.1%.

Liquidity

– Cash Flow

As of 31 December 2019, the Company had cash and cash equivalents equal to 42 million baht, a decrease of 12 million baht due to the following:

  • Net cash provided by the Company’s operations in the amount of 597 million baht, mainly due to earnings before income tax after deduction of non-cash expenses of 399 million baht, changes in trade and other receivables, decreased by 426 million baht, finance lease receivables increased by 12 million baht, inventories decreased by 37 million baht, other current assets decreased by 1 million baht, and trade and other payables decreased by 167 million baht. As a result, the Company had a net cash flow from the operations of 685 million baht and the Company had paid employee benefit obligations of 15 million baht and paid a net income tax of 72 million baht, resulting the Company to have net cash from the operating activities at 597 million baht.
  • Net cash used in the investment activities of the Company amounted to 251 million baht due to the Company had cash to buy current investments of 237 million baht, fixed deposits at bank decreased by 2 million baht, cash received from disposal of property, plant and equipment and intangible assets at 0.5 million baht, purchase of fixed assets and intangible assets increased by 35 million baht from the investment in equipment, office supplies and decorations paid to the creditors for the assets payable of 0.4 million baht, and interest income of 18 million baht.
  • Net cash used in financing activities of the Company was 358 million baht due to the Company had 79 million baht in cash to pay back the bank overdrafts and short-term loans from financial institutions, cash paid from the short-term loans by other companies for the amount of 28 million baht, cash received from sales and lease back by 31 million baht, long-term loans decreased by 24 million baht, payment of liabilities under financial lease for the amount of 76 million baht and a dividend payment of 168 million baht.

– Significant Liquidation Ratio

As of 31 December 2019, the Company had a debt to equity ratio of 0.7 times, a decrease from 2018.The decrease in liabilities mainly occurred from short-term loans from the financial institutions, trade account payable and other payables while the shareholders’ equity increased from the net profit of the year. However, total liabilities of the Company were the liabilities arising from the normal business operations.

The debt-service coverage-ratio in 2019 was 1.5 times, increasing 2.4 times from the figure in 2018 due to the cash flow of the Company’s operation in 2019 was increased by 597 million baht. The main reasons were that the accounts receivable and other receivables of 350 million baht were decreased, the financial lease receivable were increased by 23 million baht, the inventories has decreased by 46 million baht, other non-current assets were decreased by 1 million baht. The trade and other payables were decreased by 167 million baht and the employee benefit obligations were 40 million baht. The Company paid back debts of 207 million baht, bought assets of 35 million baht and paid 168 million baht for dividends.

The Company’s liquidity ratio at the end of 2019 was 1.9 times, increased from 2018 due to the decrease in trade receivables.The Company has an average collection period increased from 53 days to 60-days.The average payment period increased from 38 days to 39 days and the average product selling period increased from 20 days to 24 days. For the quick ratio at the end of year 2019, the current ratio was 1.2 times equal to year 2018 due to trade receivables and other receivables after deduction of allowance for doubtful accounts decreased by 350 million baht and trade and other payables decreased by 181 million baht.

 

Source of Funds

– Liabilities

The total liabilities at the year-end of 2019 was 1,389 million baht, a decrease of 260 million baht from the previous year. The total debt consisted of the current liability of 1,169 million baht or 84% of the total liabilities and the non-current liabilities at 219 million baht or 16% of the total liabilities.The main reasons for the decrease in liabilities were as follows:

  • Current liabilities of 1,169 million baht, a decrease of 260 million baht, resulting from a decrease in Trade and other payables of 181 million baht.The Company had an trade payable of 572 million baht, a decrease of 194 million baht. The Company had an average payment period of 39 days. The other payables amount was 328 million baht, an increase of 13 million baht, consisting of accrued expenses, deposits and deferred Incomes. The bank overdraft and short-term loans from financial institutions decreased by 79 million baht, the current portion of financial lease liabilities decreased by 16 million baht, the long-term liabilities due within one year decreased by 15 million baht, the short-term borrowings decreased by 6 million baht, and income tax payable increased by 3 million baht.
  • The non-current liabilities of 219 million baht increased by 0.6 million baht due to an increase in non-current provisions liabilities for employee benefits by 40 million baht, a decrease in long-term finance lease liabilities by 26 million baht, a decrease in long-term borrowing by 9 million baht, and a decrease in deferred income tax by 5 million baht.

– Shareholder’s Equity

The Shareholder’s equity at the end of year 2019 was 1,893 million baht, an increase of 2% due to the net profit in 2019 was 220 million baht.The Company paid dividends in 2019 at the rate of 0.47 baht per share, totaling 169 million baht.

Committed Liability and Out-of-Balance Sheet Management

The Company engaged in lease contracts as follows:

  • Car lease contracts for 5 years which cannot be terminated. As of 31 December 2019, the minimum future payment within one year was 11 million baht and 10 million baht to be paid within 5 years.

The Company has disclosed this information in the Note of Financial Statement, Clause 32 of financial statement year 2019.