Page 57 - Annual report eng 2019

Tycoons Worldwide Group (Thailand) Plc.

(2) Expenses

Cost of sales
Cost of sales is primarily composed of conversion cost and raw materials, of which billet
is the main component. In year 2019, costs of sales were 9,642MB, decreased by 3.38%
compared to year 2018. This was mainly because the sales price of steel decreased.

Selling and administrative expenses (SG&A)
In year 2019, selling and administrative expenses were 338MB, an 6.30% decrease
from year 2018, The ratio of SG&A/Sales was 3.53% in 2019 and 3.49% in 2018.
The major components of SG&A are depreciation, salary and wages as well as
transportation costs, which vary directly with sales volume. The decrease in SG&A
in 2019 is mainly caused by the transportation costs decreased.

(3) Profit

Gross profit

In 2019, gross margin was (80)MB. The rate decreased from 3.63% of 2018 to 0.84% of
2019, mainly due to the year 2019, the selling price of finished steel and billet in foreign
countries decreased resulting in the selling price of various products of the company
decreased together with the appreciation of the baht which resulted in the sales decline.
The company's gross profit decreased.
In 2018, gross margin was 376MB. The rate decreased from 7.30% of 2017 to 3.63% of
2018, mainly due to the steep decline in international prices of finished steel and billets
since November 2018. As a result of the decrease in selling price in quarter fourth, the
company reports a decrease in gross profit.

Operating profit

Operating loss in 2019 was 417MB, the rate decreased from 0.15% of 2018 to -4.37%
of 2019, resulted from the decrease in gross profit rate.
Operating profit in 2018 was 15.53MB, the rate decreased from 2.88% of 2017 to 0.15%
of 2018, resulted from the decrease in gross profit rate.

Net income

Net loss in 2019 was (998)MB, net income rate increased from 0.15% of 2018 to
2,713.18% of 2019. The net loss (998)MB of 2019 mainly due to decrease in selling prices
of finished steel products and billet abroad, resulting in a decrease in the selling prices of
various products, together with the appreciation of the baht, resulting in a decrease in sales
resulting in the company's gross profit. Decrease in addition, in 2019, there were write-off
of unused assets and loss from listed securities by 5.35 million baht resulting in an increase
in net loss.
Net loss in 2018 was 36MB, net income rate decreased from 2.15% of 2017 to 0.34% of
2018. The net loss 36MB of 2018 mainly resulted from steep decline in international prices
of finished steel and billets since November 2018. As a result of the decrease in selling price
in quarter fourth, the company reports a decrease in gross profit.

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