Message from the Board of Directors
Paul Heinz Hugentobler
Chairman of the Board of Directors
We began the 2020 year under review with the expectation that it would be a demanding one, so we took an early decision to accelerate the strategic and operational restructuring initiatives which we had already begun in 2019. Unfortunately, we were faced with the unprecedented global COVID-19 pandemic and trading conditions were much worse than anyone anticipated. Across the entire region we operate in, we were hit badly with unavoidable lockdown measures. All of our operations have had to deal with some sort of restrictions which we anticipate will remain until vaccination programs slow down the spread of the virus within communities. We believe the business environment will remain most challenging throughout 2021 and likely beyond.
The compounding effect from an already slowing down economy at the end of 2019 alongside the combined fallout of a pandemic has required massive interventions from our management teams to address the collapsing demand for many of our products and services. We have also experienced growing competitive pressures across the region. The only saving grace was the simultaneous collapse of energy prices, a major cost component in all of our operations, which helped to cushion the price pressures to some extent.
In March, the Group initiated a tight Group-wide Crisis Management Program to decisively deal with the deepening economic conditions and business impacts of the pandemic. This required us to quickly adjust some of our manufacturing capacities, address our entire cost base, and restrict capital spending. We also took actions to standardize governance in business processes and internal controls across the Group.
Fortunately, the second half of the year saw certain markets recover faster than expected, Sri Lanka in particular. Others have now stabilized at muted levels and we are cautiously optimistic that we have passed the lowest expected levels of activity. However, we remain fully prepared to take further restructuring steps should the business conditions in any of our markets deteriorate again.
Despite all of these unprecedented challenges and headwinds, the Group has still managed to improve its financial performance. Realizing a net profit after tax attributable to equity holders of THB 3.6 billion compared to THB 3.2 billion in 2019, a cash flow from operations of THB 8.9 billion from THB 7.6 billion in 2019, all led to a reduction of the gearing ratio to 61 percent at the end of 2020. The Board of Directors will recommend a full year dividend of THB 9 per share, after THB 8 per share in the previous year, to the Shareholders for approval at the AGM.
The Board of Directors and Management are on high alert to the ongoing challenges across our businesses, and we remain confident that further improvements in our operational and financial performance will be achieved in the current year. We will continue to operate under the tight management regimes which began in 2019. This will set the basis for a firm groundwork that will prepare the Group well for new growth initiatives and investments.
On behalf of the Board of Directors, I wish to thank all our employees for their dedication and engagement in bringing our Group forward to meet these demanding and unprecedented performance levels, and to our Shareholders for their continued support. We are extremely grateful for the trust of the communities and their leaders across the regions in which we operate. We thank our many business partners for their commitment to working with us in a joint effort to achieve new levels of competitiveness and excellence in everything we do on our journey to become a reputable and successful regional player in the building materials sector.
Resilience is not a word often used to describe a company, yet retrospectively it is a very appropriate description for how the Group has always stepped up to the challenges we faced and succeeded over what is now just over half a century. Our history of success has always been delivered by good people, and it is to their credit we are here today in good health and spirit.