4. Management Discussion and Analysis (MD&A)

        4.1 Operating Performance Analysis and Financial Position

Operating Performance Analysis

     Operating results for the year ended December 31, 2023, the Company and its subsidiary had a loss of 91.78 million baht. Compared to the same period of the previous year, loss decreased by 41.05 million baht as the subsidiary has been improving and replacing solar panels to increase the efficiency of electricity production since last year. As a result of the said improvement in solar cell panel replacement, income from electricity production increased and there was a better return on investment. The subsidiary has undoubtedly continued to improve the efficiency of the panels of the second power plant. Therefore, the subsidiary recorded an impairment loss on solar panels that were removed in the amount of 91.46 million baht. As for 2022, the impairment of the removed panels amounted to 135.18 million baht. The impairment loss on solar cell panels in the current period decreased from the previous year by 43.72 million baht, causing the loss to decrease from the previous year. Key significant changes in the period can be summarized as follows:

       Revenue from sales and services of the Company and its subsidiary was 1,100.09 million baht, an increase of 86.77 million baht from the previous year or 8.6%.

        For the Company’s Separate financial statements, revenue from all sales and services was totaling 971.30 million baht, increased by 99.20 million baht from the previous year. Revenue from water management solutions products was 538.66 million baht, increased by 36.69 million baht from previous year. Revenue from solar rooftop products was 287.65 million baht, increased by 124.15 million baht from the previous year. Revenue from building materials products was 144.99 million baht, decreased by 61.65 million baht from previous year. As a result, the Company’s gross profit was 227.29 million baht, increased by 17.36 million baht from the previous year or gross profit margin was at 23.4%, lower than that of previous year by 0.67 %.

       For the clean energy business, which is a subsidiary of the Company, had revenue from sales  of 129.85 million baht, consisting of revenue from electricity sales of 91.40 million baht, increased by 19.03 million baht from the same period of the previous year due to an increase in a number of units of electricity produced, from investments in improving the efficiency of power plants, and an increase in electricity prices from the Ft adjustment and income from the sale of electricity – the electricity purchase price adder amounted to 38.44 million baht, decreased by 75.21 million baht from the same period of the previous year, because the electricity purchase price adder contract expired in April 2023, causing total income decreased by 56.18 million baht from the previous year. In this regard, the operating results of the subsidiary before the impairment of solar cell panels as mentioned above had a profit of 45.78 million baht, a profit decreased from the previous year by 21.94 million baht, mainly came from the income from the electricity purchase price adder decreased.

       Distribution costs of the Company and its subsidiary amounted to 151.48 million baht which belonged to the Company, a decrease of 3.42 million baht from the previous year, mainly due to a decrease in sales and marketing expenses from the same period of the previous year. The proportion of distribution costs was 15.6% of sales, decreasing from the previous year which was 17.76% of sales.

       Administrative expenses of the Company and its subsidiary amounted to 140.98 million baht, a decrease of 8.58 million baht from the previous year from personnel expenses, donations, and insurance premiums

       Other income of the Company and its subsidiary amounted to 8.32 million baht, an increase of 1.12 million baht from the previous year from the sale of removed solar panels for improvement, sales of carbon credits and sales of scrap materials.

     Financial costs of the Company and its subsidiary amounted to 5.13 million baht, an increase of 0.86 million baht from the previous year due to increased loan amounts and interest rates.

     Loss from impairment of receivable in accordance with Financial Reporting Standards No. 9 (TFRS9) amounted to 5.02 million baht, a decrease of 1.14 million baht from the previous year.

      Income tax expense amounted to 3.86 million baht, which was an item arising from the calculation of deferred tax.

       In 2022, tax revenue amounted to 1.73 million baht, was from deferred tax income of the Company and subsidiary.

       4.2 Factors or events that may affect the financial position or operations significantly in the future (Forward Looking)

The economic situation in 2023 began to recover driven by the ease of Coronavirus 2019 (COVID-19) pandemic.  Most business sectors have resumed normal operations. New investment projects for the private sector and real estate business began. However, purchasing power from consumers in general remained pressured by high levels of household debt. Therefore, the economy was unable to fully recover. For the political situation, successfully established government has brought about positive results for government investment projects. And, measures to stimulate the economy has helped strengthen purchasing power and support economic recovery. However, highly volatile currency exchange rates have pushed high impact to material cost such as resin, glass fiber, steel, solar panels and solar power generation equipment, etc. Therefore, the Company has deployed forward contracts to control product costs as much as possible.

In 2024, the economic situation is likely to recover better than last year. From the global economic situation in other regions starting to recover, the economy has begun to benefit from a strong recovery in tourism from the unlocking of visas for entering Thailand for many countries. As a result, the service sector, the hotel business, has improved facilities and renovations to service tourists. These result in positive effect on products and service, improvement of water treatment system of customer groups such as hotels, resorts, restaurant chains, etc. Moreover, climate change and global warming have resulted in the investment project to alleviate drought which could provide a good opportunity for the Company to offer products for water management and drought relief. Moreover, these include hygiene related marketing, wastewater treatment to protect the environment, and including customer group of large buildings which plans to renovate and improve existing wastewater treatment systems and reuse more water, such as old condominium projects, etc. and expand the target group to cover industries throughout the country.

The Company is in the process of improving the marketing plan for construction material products due to real estate projects and large building construction by the private sector, especially the Glass Reinforced Concrete product group, being shrinking market and having alternative materials. Most construction projects are delayed. Prices of steel and construction materials are highly volatile. Higher labor wages and labor shortages cause delays in some construction projects, affecting project cost control.

Solar Rooftop products still have many business opportunities regarding to the government policy that supports the production of alternative energy for energy security, investment promotion, lower price of equipment and solar panels, and higher electricity rates, making the private business sector’s worth investing in, and including awareness of taking care of the environment by turning to clean energy to reduce global warming and reduce greenhouse gas emissions.

For the solar power production business of the subsidiary, it continues to focus on improving the efficiency of all 3 currently operating power plants in order to produce electricity with maximum efficiency. This will generate increased income of the subsidiary. In addition, it also focuses on investing in expanding production capacity, whether it is the expansion of new production capacity that government agencies will arrange to purchase more solar power or other alternative energy sources, or expanding investment to other power plants that are currently in operation. Moreover, from long experience in managing solar power plants, the subsidiary also has an opportunity to increase income from providing maintenance services for solar power plant operating systems for other interested power plants.