13 สิงหาคม 2551
operating results for the Second Quarter of Y 2008
H.T. SET.014 / 2008
Date : August 13th , 2008
To : President
The Stock Exchange of Thailand
Re : Singer Thailand operating results for the Second Quarter of Y 2008
For the quarter,the Company has generated a profit of Baht 12.9 Million,
which represents a significant improvement compared a loss of Baht 116.6
Million for Q2 2007. As a result, the Company's Earning Per Share (EPS)
was Baht 0.05 compared to a negative figure of Baht 0.43 for Q.2 2007.
Comparing with the first quarter 2008, the Company has improved its net
income by 23.3% of Baht 10.5 Million in Q1 2008 vs Baht 12.9 Million
in Q2 2008 and its EPS from 0.04 to 0.05.
During the second quarter of Y2008, the major highlights were:-
- The Company has generated a positive operating cash flow for Q.2 equal
to Baht 53.0 Million and a positive cash flow for Q1.& Q.2 equal to 200.7
Million
- From the positive operating cash flow, the Company had been able to pay
outstanding loans for Q.2 amounting Baht 53.0 Million, and for Q.1& Q.2
amounting Baht 200.8 Million.
- From the end of December 2007, long-term loans have been reduced by
Baht 161.7 Million from Baht 683.3 Million to Baht 521.6 Million whereas
short-term loans slightly increased by Baht 0.8 Million from Baht 653.2
Million to Baht 654.0 Million giving a total reduction of borrowings of
Baht 160.9 Million.
- At the end of June 2008, the Company had a total of 211,777 installment
accounts out of which 33,271 motorcycle accounts represented 15.7% of total
portfolio, and the inventory of used motorcycles was reduced to 2,115 units.
- At the end of June 2008, the percentage of paying accounts which is
measuring how many accounts are paying from the total portfolio has been
improving by 3.04% compared with the end of December 2007.
The Company's TV commercials highlighting a multi brands, multi products
trade-in strategy have been so overwhelmingly received that the Company
plan to keep it on until the end of the year taking advantage of the
opportunity of a huge replacement business for the Company.
The Company has confirmed successful U-Turn converting a core business
based on motorcycles into a core business based on electrical home
appliances as shown in total gross sales for the second quarter of Y2008,
in which the motorcycle business represented only 5.5% of the total Gross
Product Sales for the Quarter.
In order to create a complete, updated and consistent customer and
guarantor contact information and streamline the credit approval process
including with improving the account checking function, the Company has
re-engineered the Credit Process and Customer Database Enhancements under
the supervision of the Head of Corporate Internal Audit.
Comments to Key Financial Numbers:
Income Statement
The operating performance for Q.2 2008 is indicating that the Company
has generated net profit of Baht 12.9 Million compared to the losses
of Baht 116.6 Million for Q.2 2007.
The revenue decreased from Baht 697.7 Million for Q.2 2007 down to
Baht 615.3 Million or a decline of 11.8% mainly due to net product sales
decreased by 11.8%, which was caused by a significant decrease of
motorcycle sales by -78.4% or equal to Baht -94.6 Million, partially
compensated by an increase of home appliance sales of +7.8% or equal
to Baht +32.2 Million,interest from installment sales decreased by 16.0%
or equal to Baht 24.8 Million due to a decrease of installment accounts
number from 230,957 accounts at the end of December 2007 to 211,777
accounts at the end of June 2008, which was caused by more accounts being
closed and reverted. A decrease of motorcycle sales is resulting from the
Company's strategy to re-focus on electrical home appliances, whereas
the new number of Installment Accounts of home appliances have been
increased month by month but it could not cover with the number of
accounts closed due to the Company's Policy to clear the overdue accounts
by discount and revert.
Inventory reserve as of June 2008 equaling Baht 87.0 Million was lower
than the reserve at end of December 2007 at Baht 162.0 Million due to
on going plan to clear by selling the slow-moving stock of home appliances
and used motorcycles of 3,173 units.
In summary, the Net Profit for this quarter was Baht 12.9 million compared
to a Net Loss of Baht 116.6 million for the second quarter of last year.
The favorable difference of Baht 103.7 million can be analyzed as follows:
Million Baht
i. A decrease of products sale -62
ii. A decrease of interest from Installment -25
iii. An increase of other income 5
iv. A decrease of cost of goods sold 129
v. A decrease of variable expenses 15
vi. A decrease of semi-variable expenses 22
vii. A decrease of loss on products reprocess 26
viii. An increase of period expenses -16
viii. A decrease of interest expense 10
104
Balance Sheet
Net installment and other receivables decreased to Baht 1,555 million
at end of June 2008 from Baht 1,675 million at the end of December 2007
or a reduction of 7.2%, which was caused by more accounts being closed
compared to new sales relating to phase out the motorcycle business.
At 30 June 2008 the number of installment receivable accounts was
211,777 compared to 230,957 at the end of December 2007 or a reduction
of 19,180 accounts.
Net inventories at the end of June 2008 increased to Baht 262 million
from Baht 231 million at the end of December 2007. This was mainly due
to an increasing purchase stock of new sewing machines, and washing
machines to serve sales in July and August 2008.
Trade account payable at the end of June 2008 increased to Baht 189 million
from Baht 72 million at the end of December 2007, which was caused by
increasing inventory orders for increasing sales and the extension of
credit term from major Suppliers.
Interest bearing debt was decreased by Baht 161 million during the quarter
due to continued positive operating cash flows resulting from ongoing
collections of receivable accounts.
Kindly be informed,
Yours truly,
Daniel Michel Philiponet
Managing Director