Explanation and Analysis of Financial Status and Result of The Operation

 In 2022, the consolidated financial statement of Qualitech Public Company Limited totaled 457.67 Million Baht , a increase of 65.55 Million Baht or 16.72% due to the outbreak of Corona virus (COVID-19) in year 2022. The majority of customers resumed normal business operations, which led to the company obtaining project work. As a result, income has increased.

Cost of activities related to services, and distribution, and administrative expenses is accumulated for 442.83 million baht, an increase of 57.84 million baht or 15.02% which majority of expenses is mainly from administrative expenses. The Company has a policy of diversifying its business by investing in other industries in order to create a diverse range of business opportunities and strengthen its financial position. As a result, training and operating costs have risen.

 In 2022, the company had profit attributable to the parent company of 17.86 million baht which had an increase of 11.25 million baht or 170.20% compared with last year.

Performance according to the consolidated financial statements for the year as of December 31, 2022, the company had an increase in profit attributable to the parent company of 11.25 million baht or 170.20% due to the following main reasons:

1. Income related to sales and service of 455.37 million baht, an increase of 65.68 million baht or 16.86 percent from the promising recovery in the industry after facing the outbreak of the Coronavirus 2019 (COVID-19) positively causing the company to receive more engineering inspection services continuously. An increased income is also as a result of certification service as well as an increase in service work in 2022, provided that the company recognized most of the revenue from non-destructive testing services in the amount of 206.40 million baht, inspection and quality assurance work in the amount of 189.34 million baht, and sales revenue in the amount of 32.68 million baht. The increase in sales from the previous year is attributed mainly from subsidiaries that operate the business producing and distributing electricity from solar energy, install solar panels and start selling electricity to customers in the fourth quarter of the year.

2. Cost of activities related to services, and distribution, and administrative expenses is accumulated for 442.83 million baht, an increase of 57.84 million baht or 15.02%, consisting of the cost of sales and services in the amount of 322.35 million baht, the cost of distribution in the amount of 9.92 million baht and administrative expenses in the amount of 111.57 million baht. Administrative expenses increase from the previous year in the amount of 41.95 million baht, mainly from the loss given by impairment of investments in the amount of 18.58 million baht because the associated companies had revenues and expenses that are not in accordance with the budgetary plan significantly. Expenses for purchasing ordinary shares of associated companies, such as financial advisory fees, legal advisor fees, and the review fees for the financial statements as a special case and consultant fees for organizational restructuring and strategic development planning.

3. The expected credit loss is reversed in the amount of 9.37 million baht resulting from the receipt of debt that the company had received from sources that are recognized from an expected credit loss in the previous year where the company is a creditor for providing engineering services to Nacap Asia Pacific (Thailand) Co., Ltd., which was declared bankrupt by the court in 2019. Later in the middle of 2022, the company has received partial repayment according to the process of the receiver, therefore the company reversed the expected credit losses in accordance with the amount actually paid. .

4. Share of loss from investments in associates is amounted at 4.11 million baht resulting from the recognition of the performance of the associated companies that the company invests in the proportion of 49 percent.

5. As far as the net profit is concerned, the company’s net profit attributable to the parent company is amounted at 17.86 million baht, an increase of 11.25 million baht or 170.20 percent from the operating results with increased income and cost control in service work.

As of December 31, 2022, the company had total assets of 523.82 million baht, an increase of 16.94 million baht or 3.35 percent from December 31, 2021, mainly from:

– Trade and other current receivables are amounted with an increase of 20.87 million baht resulting from trade accounts receivable net with an increase of 17.43 million baht from the previous year and other current receivables increase from the previous year in the amount of 3.44 million baht, which are other receivables related to advance payment for the purchase of assets, consumables for service use. As for trade receivables as of December 31, 2022 for the amount of 93.85 million baht, most of them are not yet due, and trade receivables overdue for less than 3 months totaling 84.87 million baht or 90.44 percent.

– Assets arising from contracts decrease by 10.43 million baht due to the ease of Coronavirus 2019 (COVID-19) outbreak, enabling the company to deliver work and issue invoices according to the target (Contract assets are revenues that have not yet been collected from customers arising from audit engagements that have been performed, but no invoice is issued yet pending final work acceptance process approved by the customer as well as pending documents related to billing steps and according to the requirements of each customer)

– Current financial assets decrease by 120.66 million baht because the company decided to invest in equity instruments to purchase common shares of associated companies.

– Investments in associated companies increase in the amount of 122.94 million baht by investing in ordinary shares of businesses that provide property management services and various services related to condominium projects to increase business diversity that will result in an ability for the company to earn more income and strengthen the financial position to grow steadily.

As of December 31, 2022, the company has liabilities of 80.64 million baht, an increase of 10.90 million baht or 15.63% from December 31, 2021, mainly from:

– Short-term loans from financial institutions, an increase of 7.74 million baht or 100 percent because the company uses such loans as working capital for business operations and expansion

– Trade and other current payables, an increase of 3.55 million baht or 9.03% due to an increase in expenses related to employees and creditors for the purchase of fixed assets.

The Company has the equity of shareholders of the parent company as of 31 December 2022 totaling 437.76 million Baht, an increase by 4.04 million Baht as of the end of the accounting period 2022 or a 1.02%, with a profit of 17.86 million baht, other Comprehensive Income of 6.26 million baht, and the company Dividends of 19.71 million baht are paid to shareholders.

As of December 31, 2022, the company holds cash and cash equivalents of 35.25 million baht, consisting of net cash flow from operating activities equivalent to 40.76 million baht, mainly from;

– Cash received from operating results 72.19 million baht

– Less cash from changes in operating assets and liabilities, net 25.03 million baht

– Less cash for paying interest and income tax of 6.12 million baht

Net cash flow used in investing activities was 32.66 million baht, mainly from

– Net cash from the redemption of equity securities 120.66 million baht

– Cash paid for the purchase of ordinary shares in associated companies of 145.05 million baht.

– Cash paid for the purchase of tools and equipment of 12.79 million baht. Net cash flow used

In financing activities was 13.74 million baht, mainly from Dividend paid 19.71 million baht

Payment of lease liabilities amounting to 3.27 million baht.

Cash received from short-term loans from financial institutions 7.74 million baht