SINGAPORE (March 1): Sri Trang Agro-Industry, the natural rubber (NR) producer, has swung to FY16 losses of THB 758 million ($30.5 million) compared the FY15 earnings of THB $1.1 billion as expenses rose and gains fell.
FY16 revenue from sale of goods and services grew 26.1% to THB 77.3 billion from THB 61.3 billion a year ago, driven mainly by a 33.4% growth of sale volume to a record high of 1.5 million tons.
This was largely a result of a pickup NR demand from tyre producers which the group says was driven by its strategy of selective selling to sacrifice market share in order to maintain profitability.
Consequently, gross profit for the year grew 53.7% to THB 5.4 billion compared to THB 3.7 billion in the previous year.
However, the group made operating losses of THB 803.7 million due mainly to higher selling and administrative expenses of THB 5.4 billion; other loss of THB 0.9 billion from rubber derivative financial instruments due to a rapid transition of NR price during the final quarter of 2016; and on lower exchange rate gains of THB 6.4 million owing to high volatility of US dollar against Thai Baht.
Additionally, the group saw lower share of profit from its glove business due to intense competition in the industry despite being offset by lower income tax and lower finance costs, thanks to more favourable movement of IDR against USD.
The group has declared an annual dividend payment of 0.4 baht per share which will be paid out on May 24.
As at 12.54pm, shares of Sri Trang are trading flat at 84 cents.
