Investor News

Clarification of Company’s performance for the year 2009
Date: 02 March 2010

2nd March 2010

RE  :  Clarification of Company’s performance for the year 2009

To   :  President

           The Stock Exchange of Thailand

The Company would like to clarify her performance for the year 2009 compared to the same period of year 2008, details as follow;

The overall rubber industry continued to enjoy a healthy demand in Q4/2009. Most of emerging countries showed a clear sign of recovery while developed countries also showed a sign of bottom out stage. The stimulation packages initiated by various governments, intended to revive the economy, has resulted in a significant increase of automobile units sold particularly China. It was totally in contrast to the situation in Q4/2008 caused by the failure of various financial institutions in USA and EU countries.  The Company was also beneficial from the stellar performance of one of the affiliated companies - one of the largest medical examination glove producers in the world.   The glove demand last year has been spectacular due the major concerns of flu epidemic at global level. There was the shortage of products compared to existing production capacity.

The Company had delivered 221,769 tons of goods in Q4/2009, an increase of 19 per cent from previous quarter and 81 per cent compared to the same period of year 2008.  With the improved world economy and continued strong demand from tire manufacturing industry, the Company sales turnover increased by 46 and 49 per cent from previous quarter and Q4/2008 respectively. The value was 15,739 million Baht. The major contribution of strong performance was derived from higher efficiency production management from Block rubber line. The gross profit margin has increased from 3 per cent to 7.8 per cent with the value of 1,223 million Baht. The contribution profit from affiliated companies also jumped from 84 million Baht to 258 million Baht. Adding foreign exchange gain of 484 million Baht and much lower cost of fund, the last quarter net profit was 1,183 million Baht (5.92 Baht/share) compared to the loss of 414 million Baht (2.07 Baht/share) in the quarter 4/2008.

In year 2009, the Company had sales turnover of 45,585 million Baht, a decline by 24 per cent from year 2008. This was due to the substantial price decline incurred during late quarter 3/2008 – quarter 1/2009. At the end of first quarter 2009, the natural rubber price has declined by 53 per cent from the starting period in year 2008, followed by an increase of 59 per cent by the end of year 2009. However the volume sold was 759,021 tons, an increase of 83,340 tons or 12 per cent.  The management was able to achieve more market share with the history record sales volume under much uncertainty world economy. The below table illustrated the movement of natural rubber price for the past 8 quarters.

Average price	Q1/08	Q2/08	Q3/08	Q4/08	Q1/09	1st period decrease%	Q2/09	Q3/09	Q4/09	2nd period increase%
TSR	2,651	2,945	2,972	1,554	1,328	-55%	1,524	1,835	2,516	+65%
RSS	2,736	3,035	2,984	1,591	1,461	-51%	1,664	1,995	2,565	+54%
Average	2,693	2,990	2,978	1,573	1,394	-53%	1,594	1,915	2,541	+59%

Average selling price for the year 2009 ranged from US Dollar 1,800-2,200 per ton. With reference to Singapore Commodity Exchange (SICOM), the rubber price declined by 26-29 per cent.  The average price of Ribbed smoke sheet (RSS) and Block rubber (TSR) per ton were US Dollar  1,921 and US Dollar 1,801 compared to US Dollar 2,587 and 2,531 in the year 2008 per below table :

Average price	Q3/09	Q4/09	Increase	Increase%	year 2008	year 2009	Decrease	Decrease%
TSR	1,835	2,516	681	37%	2,531	1,801	-730	-29%
RSS	1,995	2,565	570	29%	2,587	1,921	-666	-26%

The management was able to improve efficiency on the production line at every stage. The raw material procurement has been done at the competitive market rate that resulted in higher gross profit margin from 4.90 per cent to 7.0 per cent.  The gross profit margin was 3,210 million Baht.  Coupled with the strong performance from affiliated companies, the Company has recorded higher sharing of profit from 383 million Baht to 745 million Baht.  The Company at the group level also beneficial from following factors - the foreign exchange gain which mainly derived from positive impact from subsidiary in Indonesia, the stringent control of various expenses as well as much lower interest expense during the year. The Company also recorded the employee retirement benefit item on this year balance sheet for 73 million Baht that affected retained earning of year 2008 by 64 million Baht and this year profit and loss by 9 million Baht. In conclusion the Company has made net income of 2,142 million Baht (10.71 Baht per share) compared to 618 million Baht profit (3.09 Baht per share) in year 2008

Please be informed accordingly.

Yours faithfully

Kitichai Sincharoenkul
Director