The company's revenues consist of revenue from sales of land and houses which are recognized upon full payment and the land title deeds and constructions had been transferred to the buyers. And service income on house constructions which are recognized in proportion to the stage of completion of the contract.
The revenue recognition schedule for the year 2018 - 2016 by the type of real estate.
| Type | Sales | |||||
| 2018 | 2017 | 2016 | ||||
| Unit | MB | Unit | MB | Unit | MB | |
| Condo | 1,559 | 3,966 | 1,881 | 4,246 | 491 | 1,030 |
| Single Detached house | 148 | 751 | 159 | 845 | 161 | 780 |
| Townhouse / twin house | 1,774 | 4,874 | 2,255 | 6,035 | 1,205 | 3,075 |
| Land | 1 | 20 | 1 | 2 | - | - |
| Total | 3,482 | 9,611 | 4,296 | 11,128 | 1,857 | 4,885 |
| % Increase from prior year | -19% | -14% | 131% | 128% | 6% | 10% |
| Type | Transferred | |||||
| 2018 | 2017 | 2016 | ||||
| Unit | MB | Unit | MB | Unit | MB | |
| Condo | 315 | 980 | 637 | 1,569 | 636 | 1,330 |
| Single Detached house | 76 | 416 | 155 | 783 | 139 | 686 |
| Townhouse / twin house | 925 | 2,520 | 1,034 | 2,604 | 1,032 | 2,627 |
| Land | 1 | 20 | 1 | 2 | - | - |
| Total | 1,317 | 3,936 | 1,827 | 4,958 | 1,807 | 4,643 |
| % Increase from prior year | -28% | -21% | 1% | 6.8% | -4% | -14% |
Condominium For the year 2018, condominium sales were 3,966 million baht, a decrease of 280 million baht from the year 2017, since in 2018 there were only 1 new project launched name A Space Mega 2. At the same time, projects that continued from last year still generate sales.
The main sales are from the A Space Mega 2 and A Space Mega projects with sales of 2,409 million baht this year. A Space Mega 2 project is a new project launched in 2018 and A Space Mega project is an ongoing project from the end of last year. While the A Space I.D. Asoke - Ratchada project, which has been very popular last year Sales decreased from last year. This year, sales were at 600 million baht. In addition, other projects the company can still generate sales especilly the Chalermnijit Art De Maison, A Space Me Rattanatibet, A Space Me Bangna and A Space Me Sukhumvit 77, which have combined sales in this period of 954 million baht.
As for the transfer of condominiums for the year 2018, when compared to 2017, the company recognized revenue from condominiums in the amount of 589 million baht from the previous year, 3 major projects, namely A Space I.D. Asoke - Ratchada, A Space Me Sukhumvit 77 and A Space Me Rattanathibet which were recognized in 2018 at 568 million baht, 277 million baht and 102 million baht. In addition, the baht respectively as income from other condominium projects of 33 million baht. Most of the revenue still comes from the same project that has been continued from the previous year. There are 3 main projects, namely A Space I.D. Asoke - Ratchada, A Space Me Sukhumvit 77 and A Space Me Rattanathibet which has revenue recognition in 2018 at 568 million baht, 277 million baht and 102 million baht respectively. In addition, it is revenue from other condominium projects of 33 million baht.
For the year 2017, sales of condominiums amounted to Baht 4,246 million which increased from prior year for Baht 3,216 million. The increasing of revenue increase is mainly from the new project launched during the year and the international market expansion including with revenue from the projects continued from last year.
The main sales came from the A Space Mega and A Space I.D. Asoke - Ratchada projects with sales of 2,808 million baht this year. A Space Mega project is a new project launched. In the year 2017, the A Space I.D. Asoke - Ratchada project is a continuing project from the previous year. During the year, there is also one new launch project, Chalermnit Art De Maison, which generated sales of 312 million baht this year. In addition, other projects of the company can also generate more sales in this period as well. Especially the A Space Me Rattanatibet project, A Space Me Bangna and A Space Me Sukhumvit 77 which have combined sales in this period over 1,121 million baht for this reason. Therefore, resulting in the total sales of this period higher than the same period of the previous year.
As for the transfer of condominiums for the year 2017, compared to 2016, the company recognized revenue from condominiums in the amount of 239 million baht higher than last year. Last year, 3 major projects, namely A Space I.D. Asoke - Ratchada, A Space Me Bangna and A Space Me Sukhumvit 77, with revenue recognition in 2017 at 742 million baht, 250 million baht and 339 million baht. According to the order, including the transfer of new projects started during the year is a space which has Nonthaburi recognized revenue of 215 million baht this year as income from other condominium projects.
However, if considering the number of units transferred Will find that the number of units is not different from the previous year But the company can make higher income Which reflects the adjustment of higher selling prices from last year.
Single Detached House For the year 2018, the sales of single detached houses decreased from the year 2017 in the amount of 94 million baht due to the launch of two new projects in late 2018, resulting in no sales from new projects in the period. Most of the incoming sales still belong to projects that have been in operation since last year, such as Areeya Como Wongwaen - Ramintra, Areeya Como Wongwaen - Ratchapruek, The Village Cottage Kanchanapisek - Ratchapruek and Areeya Metro Kaset with total sales of 538 million baht.
The transfer amount for the year 2018 decreased from the year 2017 in the amount of 367 million baht due to the fact that the company launched two new projects in the end of 2018, resulting in no transfer from the new project. Which the amount that came into the project is still completed and the ownership has been transferred since the previous year such as Areeya Como Wongwaen - Ratchapruek, The Village Cottage Kanchanaphisek - Ratchapruek, The Colors Donmuang Songprapha Phase 2 and Areeya Metro Kaset with total sales of 257 million baht.
For the year 2017, single - detached house sales increased by Baht 65 million from 2016 as a result of the company launching a new project in 2017, "The AVA Residence", a single detached house project on Sukhumvit 77 with the selling price starting at 30 million. This project generate sales for Baht 123 million. In addition, The Projects that have been in operation since the prior year, such as Areeya Como Bangna - Wongwaen and Areeya Wongwaen – Ramintra also increase sales this year. For this reason, the total sales are higher than the prior year.
For the revenue from transfer of the year 2017, it was increased by Baht 97 million from 2016. The increasing was from a new project in 2017, "The AVA Residence", a single detached house project on Sukhumvit 77 which had revenue recognition this year for Baht 74 million and revenue from the Projects that have been transferred since the prior year, such as Areeya Como Bangna - Wongwaen and Areeya Wongwaen – Ramintra also continue transferred this year and recognize revenue for Baht 480 million. For this reason, the revenue from transfers was higher than the prior year.
Townhouse Townhouse is the main product of the Company and the main target of townhouse project is people with low to medium income level. As of 31 December 2018. The Company has 37 townhouse projects with total project value of 16,271 Million Baht or 6,398 units, and recognize revenue this year for 36 projects, amounting to 16,249 Million Baht and recognize revenue from the transfer of ownership for the year 2018, equal to 2,520 million baht.
Townhouse is the main product of the Company and the main target of townhouse project is people with low to medium income level. As of 31 December 2017, The Company has 25 townhouse projects with total project value of 11,828 Million Baht or 4,423 units, and recognize revenue this year for 23 projects, amounting to 2,604 Million Baht.
As of 31 December 2016, there were 30 townhouse projects with total project value of 15,059 Million Baht or 5,579 units, which included 9 new projects opened in the year 2016, altogether contributed the total project value of 4,260 Million Baht and total revenue recognition amounting to 2,627 Million Baht.
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Cost of sales of real estate
The cost of sales for the year 2018 increased from prior year from Baht 3,302 million to Baht 2,475 million, representing an decrease of Baht 827 million or 25%, due to the decrease in cost of sales of single detached houses and townhouses by Baht 388 million and decreasing in cost of sales of condominiums for Baht 439 million. This decrease in cost of sales is the same as revenue from sales of real estate that have decreased this year. The gross profit margin of 2018 and 2017 is 37% and 33%, respectively.
The cost of sales for the year 2017 increased from prior year from Baht 3,056 million to Baht 3,302 million, representing an increase of Baht 246 million or 8%, due to the increase in cost of sales of single detached houses and townhouses by Baht 102 million and increasing in cost of sales of condominiums for Baht 144 million. The increase of cost of sales was higher in the same way as the sale revenue. Gross margins of 2017 and 2016 are 33% and 34%, respectively.
For the year ended December 31, 2016, the cost of sales of real estate decreased by 24% from prior year (cost of sales in 2016 and 2015 amounted to 3,056 million baht and 4,017 million baht, respectively) mainly due to decrease in cost of sales of real estate from the cost of land sales of Baht 862 million in previous year. However, there is no sale of land in 2016. Therefore, when considering the cost of sales of real estate, only the portion of the house and condo will decrease from last year to 99 million baht. The company has improved cost management makes the perceived cost of home sales fell 317 million baht. The cost of condominium projects increased of Baht 218 million from the previous year due to the transfer of ownership of the project began in late 2015 and the second quarter of 2016 of two projects namely A Space Me Sukhumvit 77 and A Space I.D. Asoke – Ratchada.
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Gross Profit Margin
The Company's gross profit for the year 2018 and 2017 is Baht 1,460 million and Baht 1,656 million, or 37% and 33%, respectively. The increase in gross margin in 2018 was due to the company having more efficient cost of sales management. Making it possible to increase the gross margin more than 2017.
The Company has gross profit for the year 2017, 2016 amounted to Baht 1,656 million and Baht 1,587 million, respectively, or 33% and 34%, respectively which has no significant difference for the gross profit margin of both years By the future trend, the company will have more efficient cost management. Making it possible to increase the gross margin in the future.
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Unrealized Gain (loss) in Fair Value on Investment Properties
As at 31 December 2018, the Company had unrealized loss from the fair value of investment properties amounting to Baht 2 million. The Company recorded investment properties at fair value estimated by an independent appraiser. Using the Income Approach. The main assumptions used in the valuation include occupancy rate, rental rate increase, discount rate and return rate. In addition, it is income from rental and service fees for investment properties. And other types of income of the company according to the appraisal report dated 28 December 2018.
At 31 December 2017, the Company had unrealized loss in fair value on investment properties of 32.55 Million Baht. The Company presented investment properties in fair value which were appraised by the independent property valuers in the basis of income approach and the principal assumptions used in the appraisal are as follows: Rental rates, increasing rate of rental, discount rates and yields including with revenues from rental and services related to investment property and other types of income of the company as addressed in the appraisal report dated 17 January 2018.
At 31 December 2016, the Company had unrealized loss in fair value on investment properties of 44 Million Baht. The Company presented investment properties in fair value which were appraised by the independent property valuers in the basis of income approach as addressed in the appraisal report dated 5 January 2017 and 3 February 2017.
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Selling Expenses
Type Transferred 2018 2017 2016 MB Transferred % Transferred MB Transferred % Transferred MB Transferred % Transferred Selling Expenses 716.7 3,936.1 18.2% 742.8 4,958.1 15.0% 519.3 4,643.3 11.2% % Increase (Decrease) (26.1) 3.2% 223.5 3.8% (16.5) (1.6%) The main selling expenses of the company and subsidiaries consist of advertising expenses, Public relations , marketing expenses ,transfer fees , specific business tax, and expenses related to other sales. The transfer fee and specific business tax will vary according to the revenue from the transfer of real estate. In the year 2018, when compared to the year 2017, it was found that the transfer amount decreased. In addition, it also decreased from advertising expenses especially in the part of billboards but while there are more brand building costs which will result in long - term sales and profit for the company that will increase in the future.
In 2017, compared with 2016, the company has increased in transfer amount which make the transfer fees and special business tax increase as well. In addition, the cost of advertising has increased especially online media and events, and in 2017, the company expand to international market so this also make the cost of marketing and events increased. As a result of international market expansion, the company can generate sales over 1,049 million baht, representing 10% of total transfer revenue in 2017.
In the year 2016, Advertising expenses, public relations expense have increased, especially in the billboard, online media and events has increased this year's expenses.
However, in year 2016, the government issued a policy to reduce Transfer fees from 1 percent to just 0.01 percent in January - April 2016, thus resulting in a decrease in selling expense for 2016, even with increased transfers.
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Administrative expenses
Type Transferred 2018 2017 2016 MB Transferred % Transferred MB Transferred % Transferred MB Transferred % Transferred Administrative expenses 552.0 3,936.1 14.0% 577.7 4,958.1 11.7% 523.9 4,643.3 11.3% % Increase (Decrease) (25.7) 2.3% 53.8 0.4% 87.9 0.9% For the year 2018, the company had administrative expenses less than the year 2017 in the amount of 25.7 million baht, mainly due to the decrease in home care expenses before delivery and the cost of project maintenance because the company focuses on construction control policies including inventory management to reduce this cost.
For the year 2017, the company had administrative expenses more than 2016, amounting to 53.8 million baht, mainly due to the following expenses: Home care expenses before delivery And expenses for overseeing the project which increased according to the number of units of houses that were completed and the number of projects both horizontal and vertical from 39 projects in 2016 to 56 projects in 2017 and increased from staff expenses and management fees in order to be able to accommodate the increasing work from the expansion of the business, however, the proportion of administrative expenses per transfer between 2017 and 2016 is not much different compared to last year which increased 0.4percent while the transfer amount increased more than 315 million baht.
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Finance costs
For the year 2018, the company had finance costs of 227 million baht, while in 2017 the financial cost was 260 million baht. The financial costs decreased by 33 million baht or 13 percent, mainly due to the interest on bills of exchange with an additional investment of 102 million baht at the end of 2018. While the year 2017,the company has invested in bills of exchange at the beginning of the year resulting in the overall interest rate of bill of exchange including the reduction of bank fees. And the outstanding amount of debentures decreased from the year 2017 in the amount of Baht 608 million.
For the year 2017 and 2016, the Company's financial cost was Baht 260 million and Baht 237 million, respectively. Increasing from prior year for Baht 23 million or 10% which resulting from the interest cost from debentures and debenture issuing costs. During the year 2017, the Company issued debentures amounting to Baht 2,997 million and debenture redemptions of Baht 3,000 million.
For the year 2016, financial cost was in amount of 237 Million and 166 Million Baht in the year 2015 increased by 43 percent. Mainly due to the Company had financial cost from debentures increased. Which in October 2015, the Company issued 1,000 million baht of debentures and 1,353.20 million baht in April 2016, (Redeemed of 511 million baht in April 2016) and issued 647 million baht in October 2016.
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Net Profit
For the year 2018, the Company's net profit was Baht 31 million, or 0.8% of total revenue, while net profit was Baht 98 million or 2% in 2016. Net profit decreased from prior year for Baht 67 million or 68%. Mainly due to the decrease in revenue from real estate sales and increased branding costs The company foresees long - term effects on sales and profits of the company that will increase in the future. But at the same time able to manage administrative expenses more efficiently.
For the year 2017, the Company's net profit was Baht 98 million, or 2%, while net profit was Baht 263 million or 6% in 2016. Net profit decreased from prior year for Baht 165 million or 63% due to the increase in selling expenses, such as advertising costs, marketing costs, advertising on billboards and especially online media and events. In addition, in the year 2017, the company expanded its customer base to overseas market. However, the increase in advertising and marketing this year, the company has analyzed the customer thoroughly and use the advertising and marketing tools, both in offline and online to communicate to the potential customers directly including the expansion to overseas market which will be a long - term impact on sales and profits in the future.
In addition, The Company had the Actuarial loss of Baht 23 million at the end of year 2017 due to the change in assumptions on employee benefit obligation. However, this item is included in the other comprehensive income statement and has no impact on the Company's earnings per share.
For the year 2016, the Company reported net profit of 263 million Baht, increased 22 percent from 217 million Baht in the year 2015. The main factor was the increase in revenue of real estate and effective project cost management.
From the above performance, Considering the company's profitability ratio Profitability Ratio For the year 2018, 2017 and 2016, the company has gross profit margin of 37, 33 and 34 percent respectively and the company has a net profit margin of 0.8, 2 and 6 percent respectively. The company has a rate of return to shareholders. Equal to 4, 3 and 8 percent for the year 2018, 2017 and 2018, respectively.
4. Financial position
4.1 Assets
|
2018
|
2017
|
2016
|
|
| Total assets (Million Baht) | 14,297 | 13,510 | 13,516 |
| Increase from the previous year (Million Baht) | 787 | (6) | 655 |
| Percentage | 5.8 | (0.0) | 5.1 |
| Real estate projects under development (Million Baht) | 11,492 | 11,474 | 11,396 |
| Increase from the previous year (Million Baht) | 775 | 78 | 465 |
| Percentage | 7.2 | 0.7 | 4.2 |
For the year 2018, compared to the year 2017, the total assets increased mainly from investment properties from the purchase of additional land in Bangna and Pattaya and also developing low - rise projects in the Sai Noi and Rangsit zones, which are additional continuous phases including the development of high - rise projects in the Rajadamri, Bangna and Sukhumvit zones to support the transfer of ownership in the future.
For the year 2017, compared to 2016, total assets decreased slightly. Due to the decrease in Fixed assets and investment properties with the net increase in real estate projects under development, deposit of land and trade and other receivables.
The decrease in Fixed assets And investment property are due to the depreciation recognized during the year and unrealized losses on fair value of investment properties of Baht 98 million and Baht 33 million, respectively. The increase in real estate projects under development and the deposit of land is due to the low - rise projects under development in Bangna, Sai Noi and Rangsit and high - rise projects in the Rajdamri and Rattanathibet area, Including additional land acquisition in Bangna, Hathairath, Rangsit and Bang Lamung. For the increase in trade and other receivable was due to the income from penalty of the delayed project.
In the year 2016, Slightly increased in Real estate projects under development because of launched the new projects in year 2015 in the area Kanjanapisek - Ratchapruek (Soi noi), Wongwean - Ramintra, Wongwan - Ratchapruek (Bangbuathong), Rungsit, Ladkrabang - Suvarnabhumi and expansion in Bangna. Furthermore, The Company is acquired land in the area Sukhumvit zone.
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Cash and Cash Equivalent
Cash flow for the year ended 31 December 2016 to 2018 as follows.
2018 2017 2016 Cash flow from operating activity before changing of operating assets and liabilities 364 524 695 Changing of operating assets and liabilities -27 508 -437 Corporate income tax -64 -84 -51 Net cash provided by (used in) operating activities 273 948 207 Net cash provided by (used in) investing activities -119 -22 -77 Net cash provided by (used in) financing activities -360 -956 -114 Cash and cash equivalent increase/ -decrease -206 -30 16 Cash and cash equivalent at the beginning of the year 292 321 306 Cash and cash equivalent at the end of the year 86 292 322 From the figures of cash flow as of 31 December 2018 above, the Company has balance of cash and cash equivalents decreased from December 31, 2017 amounting to Baht 206 million, resulting from the net cash used in the three operating activities. (1) Cash flow used in operating activities for Baht 119 million (2) Cash flow used in financing activities for Baht 360 million and (3) Cash flow from operating activities for Baht 273 million.
When compared to 2017, the cash flow used in the investment activities decreased as a result of reduced bank deposits and cash flow used in financing activities decreased Due to increased cash received from long - term and short - term loans from financial institutions For cash flow derived from operations before the change in operating assets and liabilities decreased Mainly due to lower operating profit from last year.
From the figures of cash flow as of 31 December 2017 above, the Company has balance of cash and cash equivalents decreased from December 31, 2016 amounting to Baht 30 million, resulting from the net cash used in the three operating activities. (1) Cash flow used in operating activities for Baht 22 million (2) Cash flow used in financing activities for Baht 956 million and (3) Cash flow from operating activities for Baht 1,084 million.
Compared to 2016, cash flow used in investing activities was decreased due to the company decrease in investing in fixed assets from last year. Cash flow used in financing activities increased due to the repayment of short - term loans from financial institutions during the year and change source of fund to long - term loans instead. For the Cash flow from operations before changes in operating assets and liabilities which decreased was mainly from the lower operating profit from last year.
As of 31 December 2016, cash and cash equivalent increased from the year 2015 by 16 Million Baht mainly from (1) Net cash provided by operating activities by 207 Million Baht. (Due to investment in real estate project under development and transferred in the period) (2) Net cash used in investing activities by 77 million baht, due to purchase machinery and construction equipment and vehicles. (3) Net cash used in financing activities by 114 million baht, mainly due to repayment of long - term loans from financial institutions, finance costs paid and repayments of debentures totaling 4,132 million baht and decrease in bank overdrafts and short - term loans from financial institutions, repayment of finance lease liabilities, dividends paid totaling 155 million baht (However, the Company had proceeds from issuance of debentures and long - term loans from financial institutions of 4,174 million baht.)
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Deposits for Land
201820172016Deposits for Land (Million Baht) 281 292 274 Increase/-decrease from the previous year -11 18 194 As of 31 December 2018, the Company had a deposit of land decreased by Baht 11 million due to the transfer of large plots of land in Bang Na and Bang Lamung zones. But at the same time, there is additional deposit for new land located in the Bang Na zone and Banglamung as well. Therefore resulting in a decrease in land deposits.
As of 31 December 2017, the increase in Deposits for land for Baht 18 Million from year 2016 was from The Company has new deposits for new project in Sai noi and Bang Lamung zone.
As of 31 December 2016, the increase in Deposits for land for Baht 194 Million from year 2015 was from The Company has new deposits for new project in Rungsit, Sai Ma, expansion in Bangna zone.
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Investment properties
201820172016Investment properties (Million Baht) 452 454 494 Increase/-decrease from the previous year -2 -40 -41 As of 31 December 2018, investment properties decreased slightly from the previous year by 2 million baht or 0.4 percent due to the adjustment of the fair value of profits previously recognized in the previous year of Community Mall.
As of 31 December 2017, The Company had an investment properties decreased by Baht 40 million or 8% from previous year due to the adjustment of unrealized loss in fair value on investment properties Baht 32 million and the reclassification of investment property into real estate projects under development for Baht 8 million.
As of 31 December 2016, The company had an investment properties of 8 percent which decreased from that of the year 2015 mainly due to the decrease of unrealized gain on fair value adjustment of the previously recognized of community mall.
In the current period, investment properties named "Pickadaily Bangkok" and "Life Style Club" have been completed. Such investment properties is a shopping center by dividing the space for rent. The investment properties have been presented under fair value method. The fair value has been determined based on valuation performed by an accredited independent valuer, using the income approach as addressed in the appraisal report dated 17 January 2018. The valuation technique used in measuring the fair value of investment properties as rental rate, rental growth rate, Risk - adjusted discount rates, and the rental yield.
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Property, plant and equipment
201820172016Property,plantand equipment (Million Baht) 342 274 400 Increase/-decrease from the previous year 68 -126 -11 Property, plant and equipment as of 31 December 2018 increased from prior year due to reclassification of land items from real estate projects during development into land Building and equipment in the amount of Baht 93 million, including additional investment in fixed assets Both in the vehicle And kitchen equipment of restaurants but at the same time reduced from the depreciation recognized during the year.
Property, plant and equipment as of 31 December 2017 decreased from prior year due to the depreciation recognized during the year for Baht 98 million, including reclassification of previously recognized property, plant and equipment to Investment properties for Baht 55 million and also decreasing in investing in fixed assets from prior year.
Decrease in Property, plant and equipment in the year 2016 because of accumulate depreciation and disposal of assets.
On 28 March 2013,the Board of Directors Meeting has approved the Company (the "Leasee") entered into a land lease agreement ( "Leased Property") with two directors ( "the lessor) to build a head office building , for a period of 10 years from the date of land lease registration.
Now, the Company and lessor has conclusion that the lessor and the leasee agreed to extend the lease for another 10 years. As for pricing, the rental rates in the 11 to 20 year lease agreement on the new rate at market price or other appropriate price. If the Company agrees to extend the agreement, the Company must submit written notice in advance as stipulated in the memorandum. Upon the expiry of the lease term of this agreement, or any extension thereof, or upon termination of the agreement due to the fault of the Company, the Company must return the leased asset to the lessor in the same condition as before the lease commenced. The Company must demolish all assets on the leased asset, if not the ownership of assets will be transferred to the lessor without any cost. If the lessor does not intend to receive the assets, the Company has the obligation to pay for any cost, such as demolition cost as stipulated in the memorandum.
Consent to renew the lease for another 10 years, this intended to provide clarity and interest of the Company and its shareholders. However, the amendment to the terms of the lease and duration of the lease agreements have no significant impact on the financial statements of the Company.
As of 31 December 2015, all assets on the leased asset which recognized as Property, Plant and equipment in the statement of financial position were reclassified and newly recognize as "Building on lease land" and change to "prepaid rental expenses" from 2016 onward and the company has also amended the notes to the financial statement regarding the Significant Accounting Policies in the topic of "Building on lease land" to "Prepaid rental expense" and amortized over the estimate useful live of 20 years.
As of 31 December 2018, prepaid rental according to the consolidated financial statements for the year ended December 31, 2018 and 2017 had amount of 128 million baht and 136 million baht respectively, decreasing by 8 million baht with the amortization of prepaid rent during the year. Which is included in the administrative expenses category By disclosing this item in the notes to financial statements No. 15, prepaid rental and Article 34 administrative expenses by categorizing as depreciation and amortization And the company will classify the amortization of prepaid rent Being the correct rental fee in accordance with generally accepted accounting standards and financial reporting standards in the 2018 annual financial statements.
In case the reclassification from "depreciation and amortization" to "rental expense" was made, the amount of depreciation and amortization in notes to the financial statements no.32 for the year 2017 will be decreased from Baht 57 million to Baht 48 million and Baht 53 million to Baht 45 million for the year 2016. Meanwhile, the rental expense will be increased at the same amount of reclassification and no impact to the figure of Statements of comprehensive income.
For the Financial statement As of 31 December 2018, 2017 and 2016 have been reclassified to Prepaid Rental Expense as table below (Decreased from amortization prepaid rental expenses);
201820172016Building on lease land (Million baht) 128 136 145 Increase/-decrease from the previous year -8 -9 -8
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The adequacy of the provision and allowance for
doubtful accounts.
The allowance for doubtful accounts is assessed primarily on analysis of payment histories and future expectations of customer payments. Bad debts are written off when incurred.
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The ratio shows the efficiency of major operations.
Return on assets of the Company As of 31 December 2018, 2017 and 2016 was 2.11, 2.98 and 4.38 percent, respectively due to the Company had net profit in the year 2018 less than 2017. As a result, the return on assets decreased.
4.2 Liabilities and sources of financing.
|
2018
|
2017
|
2016
|
|
| Total liabilities | 10,965 | 10,169 | 10,201 |
| Increase from the previous year | 796 | (32) | 430 |
| Bank overdrafts and short-term loans from financial institutions | 417 | 347 | 1,546 |
| Current portion of long-term loans from financial institutions | 1,564 | 301 | 492 |
| Current portion of debentures | 2,031 | 1,000 | 3,000 |
| Long-term loans from financial institutions | 878 | 1,342 | 214 |
| Debentures | 4,337 | 5,976 | 3,990 |
As of 31 December 2018, the company had total liabilities increased from the year 2017 in the amount of 796 million baht, mainly due to long - term loans from financial institutions which increased by 799 million baht from additional borrowing during the year. Including overdraft and short - term loans from financial institutions which increased from the investment in bill of exchange at the end of the year At the same time, during the year 2018, there was a redemption of the bonds due in the amount of 1,031 million baht and the issuance of replacement bonds during the year in the amount of 417 million baht, resulting in a decrease in debentures from 2017.
As of 31 December 2017, the Company's total liabilities decreased by Baht 32 million from 2016. Overall, the total liabilities of 2017 and 2016 were not significantly different. During the year 2017, the Company change source of fund by reducing short - term loans from financial institutions and increase the portion of long - term loans instead for more efficient in financial liquidity management. For this reason, during the year, a large amount of short - term loans from financial institutions were repay and the borrowings in long - term loans from financial institutions increased.
For the debentures of 2017, during the year, the debentures were redeemed in the amount of Baht 3,000 million, and new debentures for Baht 2,997 million were issued. Therefore, the debentures of the years 2017 and 2016 were not different.
As of 31 December 2016, Total liabilities increased from the year 2015 by 430 million baht mainly due to the Company issued 1,353 million baht of debentures in April 2016 (Redeemed of 511 million baht) and issued 1,647 million baht in October 2016 (Redeemed of 1,000 million baht). However, overdrafts and short - term loans from financial institutions were decreased, resulting in a decrease in liabilities of 64 million baht, a decrease in long - term loans from financial institutions amounting to 919.26 million baht and repayment of financial lease liabilities of 52 million baht.
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Bank overdrafts and short-term loans from financial institutions
As of 31 December 2018, Bank overdrafts and short - term loans from financial institutions increased from the previous year by Baht 70 million or 20 percent mainly due to the investment in bill of exchange to replace the original bill of exchange that is due during the year.
As of 31 December 2017, Bank overdrafts and short - term loans from financial institutions decreased from the previous year by Baht 1,199 million due to the repayment during the year and decrease in new borrowings, especially in promissory note and change source of fund to long - term loans instead for more efficient in financial liquidity management.
As of 31 December 2016, Bank overdrafts and short - term loans from financial institutions decreased from the previous year by 64 million Baht or 4 percent mainly from promissory notes.
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Long-term loans from financial institutions
As of 31 December 2018, long - term loans from financial institutions increased by Baht 799 million as a result of changing sources of financing by investing in long - term loans instead For better liquidity management With an additional loan of 3,041 million baht this year, which is more than the previous year loan And repayments during the year, another 2,242 million baht, resulting in a long - term loan from financial institutions net higher than last year.
As of 31 December 2017, long - term loans from financial institutions increased by Baht 937 million due to the Company change source of funds by reducing the proportion of short - term loans from financial institutions and increase the portion of long - term loans instead for better liquidity management. This year, the company has borrowed Bath 2,723 million which more than last year and repayment during the year for Baht 1,786 million.
As of 31 December 2016, Long - term loans from financial institutions decreased by 919 million baht or 57 percent from prior year because of increase in revenue from sale of real estate. It can be used to more repayment long - term loan. Moreover, in April 2016 and October 2016, the Company issued debentures of 1,353 million baht and 1,646.80 million baht, respectively. Which objective for repayment the debentures maturing redemption and repayment of such long - term loan because debentures have lower financial costs.
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Debentures
As of 31 December 2018, the total amount of debentures was 6,368 million baht, a decrease of Baht 608 million from the previous year. During the year, the redemption of the debentures reached maturity of Baht 1,000 million and gradually repay the principal of the second tranche, which is a type of debenture. Gradually repay the principal in 2017, amounting to Baht 31 million. In addition, the company has issued two debentures during the year, 250 million baht and 167 million baht in October and November. In 2018, a total of 417 million baht. For the year 2018, the company issued debentures as detailed below;
On October 19, 2018, the Company issued debentures amounting to 250 million baht (250,000 units, 1,000 baht per unit) as debentures, named, unsubordinated, unsecured holders. There are bondholders' representatives Maturing on October 19, 2021, which is the replacement of the debentures due for redemption in 2018, the amount of 1,000 million baht that has been redeemed in full amount.
On November 22, 2018, the Company issued debentures amounting to 166.6 million baht (166,600 units, 1,000 baht per unit) as debentures, named unsubordinated, unsecured holders, with debenture holders' representatives, whose maturity date was 22nd, February 2022, which is a new release.
As of 31 December 2017, the debentures amounted to Baht 6,976 million, a slight decrease from the previous year of Baht 14 million. During the year, the debentures were redeemed in the amount of Baht 3,000 million and debentures were issued at Baht 2,997 million. For the year 2017, the Company issued the debentures as follows;
On January 31, 2017, the Company issued Baht 654.5 million of debentures (654,500 units, Baht 1,000 each). The debentures were registered, unsubordinated, unsecured and without a debenture holders' representative and debentures mature on 31 January 2020.
On April 5, 2017, the Company issued Baht 1,500.0 million of debentures (1,500,000 units, Baht 1,000 each). The debentures were registered, unsubordinated and secured and debentures mature on 5 April 2021. The Company has right to redeem this debenture before maturity.
On October 31, 2017, the Company issued Baht 842.3 million of debentures (842,300 units, Baht 1,000 each). The debentures were registered, unsubordinated, unsecured and without a debenture holders' representative and debentures mature on 30 April 2021.
As of 31 December 2016, the Company had debenture 6,990 million baht which increased from the year 2015 by 1,484 million baht or 27 percent. On 23 February 2016, the Extraordinary Shareholders' Meeting No. 1/2016 approved the issuance and offering of all types of debentures, with and/or without a name registered, the combined total amount not exceeding 3.0 Billion baht by issuing either single or multiple offerings.
On October 21, 2016, the Company issued 646.8 million baht of debentures (646,800 units of Baht 1,000 each). The debentures were registered, unsubordinated, unsecured and without a debenture holders' representative and debentures mature on 20 July 2019.
On October 5, 2016, the Company issued 1,000 million baht of debentures (1,000,000 units of Baht 1,000 each). The debentures were registered, unsubordinated, unsecured and without a debenture holders' representative and debentures mature on 1 October 2020. The Company has right to redeem this debenture before maturity. Meanwhile, the debenture of Areeya Property Public Company Limited No. 1/2015 due B.E. 2016 in amount of 1,000 million baht, which has been fully redeemed by the Company on 5 October 2016.
On April 1, 2016, the Company issued a debentures name of The Debentures of Areeya Property Public Company Limited No. 1/2016 due B.E. 2019 amounting to 1,353.20 million baht. Meanwhile, the debenture of Areeya Property Public Company Limited No. 1/2013 due B.E. 2016 in amount of 511 million baht, which has been fully redeemed by the Company on 12 April 2016.
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Short-term Bill of exchange
201820172016
short-term Bill of exchange (Million Baht) 131 70 1,402 Increase/-decrease from the previous year 61 (1,332) 122 As of 31 December 2018, short - term bill of exchange amounted to 131 million baht, an increase of 61 million baht from 2017, mainly due to the investment in bill of exchange to replace the existing bill of exchange during the year to be used as working capital in the company.
As of 31 December 2017, short - term bills of exchange amounted to Baht 70 million, a decrease of Baht 1,332 million from the end of last year. It was mainly from the Company policy to change the funding sources from short - term to long - term by reducing short - term bills of exchange and increase the portion of long - term loans instead for more efficient in financial liquidity management.
As of 31 December 2016, Increase in short - term Bill of exchange by 122 Million Baht or 9 percent from year 2015 for working capital in the companies. Because of the Short - term bill of exchange have lower financial costs and unsecured loans.
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Equity
As of 31 December 2018, the Company's shareholders' equity was Baht 3,332 million, slightly decreasing for Baht 8 million or 0.2% from the previous year, resulting from an increase in profit for the year 2018 of Baht 31 million and decrease by the payment of dividends during the year 2017 amounting to Baht 39 million.
As of 31 December 2017, the Company's shareholders' equity was Baht 3,340 million, increasing for Baht 26 million or 1% from the previous year, resulting from an increase in profit for the year 2017 of Baht 98 million and decrease by the payment of dividends during the year 2017 amounting to Baht 48.98 million and the Actuarial loss of Baht 23 million due to the change in assumptions on employee benefit obligation. However, this item is included in the other comprehensive income statement and has no impact on the Company's earnings per share.
As of 31 December 2016, the shareholders Equity of the Company was amount 3,314 million baht which the shareholders Equity increased from year 2015 of amount 224 million baht or 7 percent due to increase in net profit for the year of 263 million baht and dividend payment of 39 million baht during the year 2015.
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Liquidity
201820172016
Cash flow from operating activities before changing of operating assets and liabilities 364 524 695 Changing of operating assets and liabilities -27 644 -437 Income tax paid -64 -84 51 Net cash provided by (used in) operating activities 273 1,084 207 Total cash flows from operations in 2018 decreased from last year mainly due to the decrease in cash received from real estate projects during development Which corresponds to the revenue from real estate sales which decreased from the previous year Although there is cash received from trade accounts receivable and additional deposits. But a smaller proportion Therefore resulting in the overall cash flow from the operation of the decrease from last year.
201820172016Net cash provided by (used in) investing activities -119 -158 -77 Net cash flow used in investment activities in 2018 decreased from 2017,The main reason for bank deposits that are used to guarantee for the letter of guarantee until the maturity and free of burden during the year is more than 35 million baht.
201820172016Net cash provided by (used in) financing activities -3,560 -956 -114 Cash flow used in financing activities in 2018 decreased from 2017, mainly due to cash received from long - term loans from financial institutions of 799 million baht and cash received from bank overdrafts and short - term loans 70 Million Baht However, during the year Proportion of repayment of debentures higher than cash received from debentures Resulting in a 617 million net debt repayment, payment of financial costs of 554 million baht and a dividend payment of 39 million baht. In general, the net cash used in financing activities is less than 2017.
As of December 31, 2017, the company had cash flow used in financing activities of Baht 956 million due to repayment of short - term loans from financial institutions in the amount of Baht 1,200 million, payment of financial costs of Baht 595 million and dividend payment of Baht 49 million. While the proportion of repayment of debentures is higher than cash received from the issuance of debentures Resulting in a net debt repayment of Baht 21 million. However, the company has cash received from long - term loans from financial institutions of Baht 938 million baht, resulting in net cash used in financing activities this year higher than last year.
As of 31 December 2016, The Company had cash flow used in financing activities amounting to 114 million baht, mainly due to repayment of long - term loans from financial institutions, debentures and finance costs paid total amounting to 4,132 million baht, decrease in bank overdrafts and short - term loans from financial institutions, repayment of finance lease liabilities and dividend paid totaling 155 million baht. (However, the company had issued of debentures and proceed from long - term loan from financial institutions during the period amounting to 4,174 million baht).
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Significant Financial Policy Analysis Ratios
Liquidity ratio
The Company's liquidity ratio as of December 31, 2018 was 2.21 times and as of December 31, 2017 was 4.75 times, decreasing by 2.54 times. The increasing in current liabilities was mainly from the increase in debentures and current portion of long - term loans from financial institutions by 1,031 million baht in prior year to 2,031 million baht. The current portion of long - term loans from financial institutions increased from 611 million baht in the previous year to 1,564 million baht for this reason Therefore increasing current liabilities in 2018 resulting in a decrease in the liquidity ratio.
The Company has quick liquidity ratio as at December 31, 2018, equal to 0.08 times and as at December 31, 2017 is 0.23 times, decreasing by 0.15 times with the reasons mentioned above. Causing the company to have a large amount of current liabilities compared to last year and resulting in a faster ratio of liquidity from the end of last year.
The Company's liquidity ratio as of December 31, 2017 was 4.75 times and as of December 31, 2016 was 2.07 times, increasing by 2.68 times due to the Company's current liabilities decreased. The decreasing in current liabilities was mainly from the decrease in short - term loans from financial institutions and debentures due within one year. Short - term loans from financial institutions decreased from the repayment during the year and less borrowing since the Company change to funding from long - term loans instead. For the debentures due within one year, it was decreased due to the outstanding debentures due within the year 2016 amounting to Baht 3,000 million, while the balance of 2017 are only Baht 1,000 million. As a result of matters above, the current liabilities decreased for the year 2017 and affected to the better liquidity ratio.
The Company has the quick ratio as of December 31, 2017, equal to 0.23 times and as at December 31, 2016 is 0.11 times, increasing by 0.12 times with the reasons mentioned above. Causing the company to have a large amount of current liabilities when comparing from last year and resulting in a better liquidity ratio from the end of last year.
The company has a liquidity ratio of 2.07 times as of 31 December 2016, decreasing from 2.44 times in 2015 because current liabilities increased by 1,152 million baht, equivalent to 25 percent mainly due to the increase in debentures due within one year in the amount of 1,491 million baht.
Interest coverage ratio
The company has interest coverage ratio of 1.29 times as of December 31, 2018 and 1.55 times as of December 31, 2017, which is reduced by 0.26 times. Profit before interest and income tax from operations divided by financial costs. In 2018, profit before interest and income tax from operations was less than the year 2017, amounting to 109 million baht or 27 percent, although at the financial cost of the year 2561 less than 2017, amount 33 million baht or 13%, with the proportion of profit that is lower than the cost of finance in the year Making the interest payment ratio in the year 2561 decreased from 2017.
While the Company has interest coverage ratio (Cash Basis) of 0.49 times as of December 31, 2018 and 1.82 times as of December 31, 2017, which decreased by 1.33 times due to the year 2018, the company had cash flow from operations amounted to 273 million baht, a decrease of 811 million baht from the year 2017. The main cash flow from operations decreased from the cash received from real estate projects during development that has decreased.
The company has interest coverage ratio of 1.82 times as of December 31, 2017 and 0.50 times as of December 31, 2016, which increased by 1.32 times. Profit before interest and income tax from operations divided by financial costs, which in 2017 had a profit before interest and income tax from operations less than 2016, amounting to 175 million baht, or 30 percent reduction, while financial costs Year 2017, more than 2016, amount of 23 million baht or 10 percent, with the proportion of profit declining but the financial cost increased this year Causing the interest coverage ratio in 2017 to decrease from 2016.
Debt to equity ratio
The Company has a total debt to equity ratio of 3.29 times as at December 31, 2018 and 3.04 times as at 31 December 2017. The increase in the total debt to equity ratio is caused by Increased company liabilities and shareholders' equity decreased slightly this year. The increased debt of the company was due to the increase in long - term loans from financial institutions during the year.
The Company has a total debt to equity ratio of 3.04 times as of December 31, 2017 and 3.08 times as of December 31, 2016. The decrease in the total debt to equity ratio is caused by Decreased company liabilities and increased shareholders' equity this year. The decrease in the company's liabilities was a result of a decrease in short - term and long - term liabilities from financial institutions. Including liabilities from finance leases that were reduced from repayment during the year.
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The Maintenance of the net debt to equity ratio
The Company has a duty to comply with the terms and conditions of the right to maintain net debt to shareholders' equity not exceeding 3: 1 times according to the criteria specified in the Terms and Conditions Clause 6.2. financial The Company has maintained net debt to equity ratio at 2.69 times for the debentures of Areeya Property Public Company Limited No. 2/2015 due in 2018 at the issuer. Can be redeemed before maturity At present, the debentures have been redeemed in full amount on 19 October 2018.
Therefore, the company has a duty to comply with the right to maintain net debt to equity. 3: 1 times, in accordance with the criteria specified in the Terms and Conditions, Clause 6.2. The duties that the issuer must comply with Clause 6.2.11 Financial Conditions Specify that the net debt to be calculated must be deducted by cash and cash equivalents. Temporary investment and bank deposits with guarantees for debentures as follow;
- 1) Debentures of Areeya Property Public Company Limited No. 1/2016, due B.E. 2019
- 2) Debentures of Areeya Property Public Company Limited No. 2/2016, due B.E. 2020, which the issuer can redeem before maturity
- 3) Debentures of Areeya Property Public Company Limited No. 3/2016, due B.E. 2019
- 4) Debentures of Areeya Property Public Company Limited No. 1/2017 due B.E. 2020
- 5) Secured debentures of Areeya Property Public Company Limited No. 2/2017, due B.E. 2020, which the debenture issuer can redeem before maturity
- 6) Debentures of Areeya Property Public Company Limited No. 3/2017, Series 1, due B.E. 2021
- 7) Principal repayment of the debentures of Areeya Property Public Company Limited No. 3/2017, Series 2, due B.E. 2019
- 8) Debentures of Areeya Property Public Company Limited No. 1/2561 due B.E. 2021
- 9) Debentures of Areeya Property Public Company Limited No. 2/2561 due B.E. 2022
As at December 31, 2018, the Company has maintained net debt to equity ratio equal to 2.69 times for debentures No. 1) - Article 4) and Clause 6) - Article 12) in accordance with duties in the Terms and Conditions, Clause 6.2.11) and For the debenture, Article 5) in accordance with duties in the Terms and Conditions 7.2.12) financial conditions Specify that the net debt to be calculated must be deducted by cash and cash equivalents, short - term investment and deposits at banks used as collateral.
However, the Company has prepared the policies to maintain its debt to equity ratio and capital structure to the appropriate level in the future: 1) Capital Increase Plan, 2) Partial Repayment for Debt from financial institutions and 3) Debenture Partial Redeem Plan and 4) Accelerate the sale and transfer of completed projects in both of low - rise and high - rise projects by launching new promotions and advertisement both offline and on - line to reach the potential customers including with controlling the Company's operating expenses. As a results of these policies, the Company expect the increase in revenue recognition and decrease in operating expenses which will help the profit increased, debt - to - equity ratio decreased and appropriate structure of Company's capital.
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| CALL.1797 |
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