August 10th, 2018
: Management Explanation and Analysis of Operating Results for the Second Quarter of 2018
To : The President of the Stock Exchange of Thailand
In the Second quarter of 2018, the consolidated financial statement of Thai Rubber Latex Corporation (Thailand) PLC. ("TRUBB")("the Company") showed the Company's profit before tax was 15 million Baht and corporate tax expenses was 2 million Baht, leading the net profit of 13 million Baht. Comparing to the same period of 2017, the Company had the better result, an increase of 41 million Baht. For 6-month period of 2018, the Company's net profit before tax was 151 million Baht and corporate tax expenses was 12 million Baht, leading the net profit of 139 million Baht. Comparing to the 6-month period of 2017, which the Company's profit before tax was 86 million Baht and corporate tax expenses was 6 million Baht, leading the net profit of 80 million Baht, it had the better result, and increase of 59 million Baht. Thisi was because the sale volume of latex product business increased and the cost of production decreased, which was from the field latex price decreased form 67.10 Baht per kilogram in the first half of 2017 to 45.60 Baht per kilogram in the first half of 2018 (Source: Rubber Authority of Thailand).
Comparing the operation result of the 6-month period of 2018 to 2017, the Company had sales and service incomes 3,836 million Baht, the decrease of 1,256 million Baht or 25%, because of the decrease of rubber price. Meanwhile, cost of goods sold was 3,298 million Baht, the decrease of 1,299 million Baht or 28% due to the fact that rubber price had decreased and the volume of production units had increased. Moreover, the Company had been controlling cost efficiently, leading the decrease of production cost. Currently, the company has developed its production in order to increase the quality of products.
The company had its subsidiary companies with operating results as follows:
1. For the 6-month period of 2018, Latex and pre-vulcanized latex group's profit before tax was 24 million Baht, the decrease of 96 million Baht comparing to the first half of 2017, due to the decrease in skin rubber revenues and the decrease in sales volume of its subsuduary in Shanghai (trading company) causing the decrease in revenues as much as the cost of goods sold that decreased in accordance with the decreased selling price.
2. For the 6-month period of 2018, latex product group had 170 million Baht profit before tax, the increase in profit of 174 million Bath comparing to the operating result of the 6-month period of 2017 due to the fact that the group adjusted the system and expanded the capacity of the rubber mattress and pillow business, fully starting since the 3rd quarter of 2017. The rubber thread business increased its capacity in Q1 2018, leading the increase of sale volume and the sales and service incomes, 413 million Baht or 40%. The laex product group has expanded its customer bases continually, especially in China because of its product quality with highly demanded.
3. For the 6-month priod of 2018, rubber plantation group had 43 million Baht loss before tax, the increase in loss of 13 million Baht because rubber price was fluctuated and it was at the low level. Furthermore, the group still had to bear the burden of its fixed cost, which not depended on rubber price, that caused the loss of the group business.
In term of selling expense, it decreased due to the decrease in sales volume of its subsidiary in Shanghai (trading company) ; however, trasportation cost decreased as much as the sale vokume
In term of administration expense, it increased mainly from latex product group. Since the sales volume incroeased, the group hired more employees causing more expenses and bonus for them.
The Company had the better operating reult from latex product group business generating much profit comparing to the result of first half of 2017
Please be informed accordingly,