Dear Valued Shareholders, the year under review has seen significant improvement in the operational profitability after adjusting for the losses, mostly unrealized, due to unfavorable foreign exchange rate movements. With market conditions also becoming favourable, the outlook for the next 1-2 years looks promising.
Higher production levels coupled with rising selling prices of film, partly due to step-up in raw material costs owing to hike in crude oil prices, has resulted in the topline of the Company increasing to about THB 13 billion. The reported net profit stood at THB 1,170 million after accounting for Exchange losses of THB 264 million as against a net profit of THB 1,366 million last year supported by THB 326 million of Exchange gains.
A slowdown in the pace of capacity addition has helped demand supply become more balanced with consequent increase in utilization rates globally. While this would inevitably lead to creation of additional capacity in the future to cater to the demand growth, we believe that growth in supply would be more moderate and rational as compared to the past.
The Company remains financially strong and confident about the future of this industry. The geographically diversified presence of the Company along with the extensive product offering and wide spread customer base has helped the Company to increase sales and would help the Company to do so in the future as well. A new Metallizer in the US and a second Blown film line in Thailand would start up in 2018 and would provide further impetus to operations and margins.
Anticipating the change in market dynamics, the Company is in the process of implementing a large greenfield project in Indonesia with the world’s highest output PET film line, downstream Metallizer and upstream PET chips continuous process plant with direct melt facility. When this facility starts up in 2019, it is expected to add to the topline and profits significantly. The Company has also recently ordered a second silicone coating line in Thailand which would cater to some niche high value added applications.
In line with the improving profitability and financial position, the Board has proposed a final dividend of 0.37 THB per share subject to approval of the shareholders. Taken alongwith the interim dividend of 0.18 THB per share, the total payout for the year is 0.55 THB per share, which is in line with declared dividend policy of maintaining a payout of about 40% of profits.
The recycling plant which the Company had started a few years ago in Thailand contributes in reducing the impact of plastic waste on the environment. The Company remains committed and will continue its effort in finding sustainable solution for rest of its waste as well as processed film waste. Apart from this, the Company regularly engages in community oriented programs across all its locations.
On behalf of the Board, I would like to thank all the shareholders, business partners and the employees of the Company for their constant support and hard work without which we would not have been able to constantly grow despite difficult situations. We look forward to continuing support in the future as well.