AN OVERALL PICTURE OF THAILAND’S ECONOMY IN 2020 DECREASED BY 6.1%, WHEN COMPARED WITH THE YEAR 2019. ITS ECONOMIC GROWTH RATE WAS 2.3% BECAUSE OF INTENSE IMPACTS OF STRICT MEASURES TO CONTROL THE PANDEMIC OF CORONA VIRUS DISEASE (COVID-19) TAKEN BY BOTH THE COUNTRY ITSELF AND FOREIGN COUNTRIES. THESE MEASURES HAD A WIDE IMPACT ON BUSINESS, EMPLOYMENT, AND PEOPLE, CAUSING THE WORLD ECONOMY THIS YEAR SLIPPED INTO RECESSION AND THE STOCK MARKET FELL. BOTH DOMESTIC AND FOREIGN INTERNATIONAL SITUATIONS ALSO HAD A WIDE IMPACT ON EVERY SECTOR OF THE ECONOMY AND THE ECONOMIC ACTIVITIES OF MANY COUNTRIES WERE BROUGHT TO A TEMPORARY HALT, PARTICULARLY THE SERVICE SECTOR RELATED TO TOURISM. ALSO, IN LATE DECEMBER 2020, THERE WAS A NEW WAVE OF THE PANDEMIC TRANSMISSION OF CORONA VIRUS DISEASE (COVID-19) IN THAILAND WHICH SPREAD THROUGH THE COUNTRY IN A LARGER AND FASTER CIRCLE THAN THE FIRST WAVE, LEADING TO ANXIETY AMONG PEOPLE IN THE COUNTRY. THEREFORE, SPENDING MONEY AND TRAVELLING DECREASED WHICH IMPACTED ON EVERY SECTOR OF BUSINESS. AS A RESULT, IT CAUSED THE ALREADY SLUGGISH ECONOMIC SITUATION TO FURTHER SUFFER A RECESSION. THE STOCK EXCHANGE OF THAILAND WAS SEVERELY AFFECTED DIRECTLY AS WELL.
The year 2020 was the challenging year for MBK GROUP. The crisis from the situation of the epidemic outbreak mentioned above had an effect on its business performance, particularly the Shopping Center Business and the Hotel and Tourism Business. Therefore, MBK GROUP had to manage and adapt its strategies to be consistent with the situation during the crisis in order that business could be conducted continuously, as well as looking for opportunities to be prepared for the New Normal in order to generate returns for shareholders continuously. An overall picture of the performance of the year ended on 31st December 2020, when compared with the year 2019, is as follows:
The revenue gained from the performance was 9,234 million Baht, a decrease of 3,015 million Baht or calculated as 25%, and the net profit in part of the Company’s shareholder equity was 149 million Baht, a decrease of 2,650 million Baht, or calculated as 95% because some business establishments had to close down according to the public sectors’ time restriction measure such as the Shopping Center Business, the Hotel Business, the Golf Business, and the Food Court Business. Moreover, in 2019, there was the revenue recognition of a special interim dividend, in an amount of 533 million Baht, from one company which was invested in. Therefore, the revenue and the net profit of the year 2020, when compared with the year 2019, had decreases as stated above.
The financial position of MBK GROUP as of 31st December 2020, when compared with the year 2019, had significant changes as follows: total assets of 57,142 million Baht, total liabilities of 35,757 million Baht— consisted of an interest-bearing debt of 18,916 million Baht and a non-interestbearing debt of 16,841 million Baht, and the equity of 21,385 million Baht. During the year 2020, MBK GROUP reserved cash of approximately 6,000 million Baht to be sufficient for the business performance under the circumstances of such a pandemic.
The Shopping Center Business. MBK Center renovated rental spaces and common areas inside the building in order to align with the crisis and support customer groups— both Thai an foreign customers. It had to maintain its position as one of leading tourist destinations.
Moreover, AI technology was used to analyze basic data and consumer behavior so that such information was used for management and business planning in order to further increase the competitiveness. Because of its determination to develop the organization continuously, MBK Center was given the award named Thailand Quality Class 2019 (TQC) for the Performance Excellence by the Office of Thailand Quality Award. It was a prestigious award expressing the organization’s performance excellence up to the world’s standards.
The Paradise Park, the Paradise Place Building, and the Nine Center renovated areas in various zones for the sake of modernity and providing a variety of products, services, and amenities in order to satisfy the need and satisfaction of various kinds of customers regularly.
The Nine Center Tiwanon is a new community mall on Tiwanon Road. It is situated on the area of more than 21 rais and its utility space is approximately 21,000 square meters. The project is located by Tiwanon Road, Pathum Thani, near Riverdale Golf and Country Club (RDGC) and Bangkok Golf Club (BKGC). It in anticipated to open in the second quarter of 2021. This project will help generate revenues and increase its land’s potential to be the Riverdale District.
The Business of Siam Piwat Co., Ltd. (SPW), as an associated company as of 31st December 2020, held 48.66% of shares. Its equity recognition in 2020 was (33.63) million Baht with the progress of its several projects as follows:
In 2020, SPW won the award for “Outstanding Store Design” given by World Retail Awards. (SPW was awarded for the third consecutive year from 2018 to 2020.)
The Icon Siam Project. For part of Icon Siam Shopping Center, it was severely affected by the situation of the epidemic outbreak of COVID-19 as well. For part of the condominiums consisted of two buildings as the Magnolias Waterfront Residences @ Icon Siam and the Residences @ Mandarin Oriental Bangkok, it is anticipated that condominiums can be sold and transferred to all customers within 2021.
Siam Premium Outlets Bangkok, a joint venture between SPW and Simon Property Group (50:50), is the first international luxury outlet project in Thailand. It is located on 150-rai area, consisted of rental spaces of approximately 50,000 square meters. It has opened since June 2020.
The Hotel and Tourism Business. Guest rooms, the infrastructure, and facilities were renovated in order to boost and modernize the convenience of staying, satisfy the need of guests and services users for their optimum satisfaction. For 2020 example, Pathumwan Princess Hotel renovated 227 guest rooms in total for the modernity and the focus on convenience. Dusit Thani Krabi Beach Resort Hotel renovated its five guest rooms to be Real Triple-styled guest rooms, making more utility spaces and more scenery to be admired, and renovated a swimming pool and its area around the swimming pool to be more beauty and more lighting. Every hotel sped marketing up continuously, increased sales channels in order to boost incomes and financial liquidity from the hotels’ existing services, and controlled expenses.
Moreover, every hotel monitored hygiene safety. It was awarded for Amazing Thailand Safety & Health Administration (SHA). In 2020, the Hotel Business also received many awards given by several institutes. More details are disclosed in this Annual Report.
The Golf Business. There are 5 golf courses provided for services. Two golf courses located in Phuket are Loch Palm Golf Course (LPGC) and the Red Mountain Golf Course (RMGC). These two golf courses ae well recognized by both Thai and foreign golfers as the famous golf courses in Thailand. LPCG received international awards such as TripAdvisor, Asian Golf Award, HAPA, Thailand Best Golf Courses, Best of Thailand Awards voted by Chinese Tourists, IAGTO, and IGOLF Charter.
The rest three golf courses in Pathum Thani are Riverdale Golf and Country Club (RDGC), Bangkok Golf Club (BKGC), and Lam Luk Ka Country Club (LLKGC). RDGC and BKGC are located within the same area, where BKGC provides both Day Golf and Night Golf services to enhance the convenience of service users in Bangkok and its vicinity. The quality of golf courses has been improved continuously. In 2020, BKGC’s condition of golf course, its clubhouse, and its lighting system were improved in order to enhance the convenience of customers. The Group’s golf courses have also formed the business partnership with international leading golf courses. As a result, the Golf Business of MBK GROUP has a variety of choices and can well satisfy the customers’ needs.
The Real Estate Business. MBK GROUP’s property development project which was already carried out is Quinn Condo Sukhumvit 101. It is a high-end condominium adjacent to the sky train station called “Punnawithi” on Sukhumwit Road. This project’s value is more than 2,000 million Baht. It was completely constructed in October 2020. Moreover, the Real Estate Business developed the project “QUARITZ RAMA 9” as a residence on the potential location next to Rama IX Road. It is near the Nine Center, schools, and leading hospitals. The project’s design is modern, luxurious, and surrounded by the nature. The projects’ value is over 600 million Baht. It was available for sales in the second quarter of 2020.
The residential project in Pathum Thani consists of the Park Riverdale project— which is designed to have gardens around the houses which makes residents live the closest to the nature. The whole project is surrounded by greenery— and the Riverdale Residence project— which is in the style of “Elite Villa” project with a panoramic view over the Riverdale Golf Course. Both projects are worth over 2,500 million Baht.
The Food Solution Business. Food-related business is run by Patum Rice Mill and Granary Public Company Limited (PRG). In 2020, consumers’ purchasing power and behavior changed, causing an overall picture of the domestic rice business’s growth rate to remain unchanged. For the foreign market, the volume of Thailand’s rice exports decreased more than the previous year because raw materials of white rice— which was the main product for the export— could be harvested less because of drought. Therefore, the price could not be competitive when compared with competitors in the world market. As a result, the export of Thai rice dropped sharply when compared with the year 2019. Exporters turned to the domestic market more. Therefore, the price competition was higher. PRG had to run business carefully in terms of plans for buying raw materials, sales, the price strategy, and building the confidence of consumers in order to be able to be competitive in the market efficiently by increasing a variety of food products and increasing the efficiency of sales and marketing in main existing channels for the optimum effectiveness by focusing on the image of quality products.
For the Food Court Business under the brand of “Food Legends by MBK”, managed by MBK Food Island Company Limited (“MBK-FI”), it has two branches situated in the center of the city. These food courts can be reached by BTS and MRT trains as well as other public transportation. They are situated on the 6th floor of MBK Center and the 4th floor of Samyan Mitrtown.
The Financial Business. It consists of business credit with property as collateral— which is good value, situated in a good location, and has potential to further develop for commercial purposes— and retail credit with condominium as collateral. Business credit with securities listed on the Stock Exchange of Thailand as collateral— which have liquidity and are value investing securities— is included. The business is performed by BMK Guarantee Company Limited. In 2020, the credit portfolio size equaled 8,912 million Baht which increased from 2019 by approximately 7.7%
The New Motorcycle Leasing Business— which provides the hire purchase of small, medium, and big motorcycles— is conducted by T Leasing Co., Ltd. In 2020, the hire purchase portfolio size was 6,607 million Baht, a decrease by approximately 9.34% when compared with the year 2019.
The Financial Business controls Non-Performing loans (NPL) at the appropriate and acceptable rate during the crisis stated above by providing relief or restructuring measures to help debtors who are affected by the situation of COVID-19. The Financial Business’s measures also comply with the public sector’s request for cooperation.
The Other Business. It is operated by Apple Auto Auction (Thailand) Co., Ltd. (AAA). The Company is engaged in the car auction, depository service and vehicle transportation— which all employ appraisal and vehicle inspection standards from Japan. AAA has the online auction system through E-Auction which its advanced features are among the country’s best ones. Moreover, the Apple Auto Trade system is developed. It is an intermediary between selling and buying cars. The Apple E-Bidding system is another channel to increase full services offered to buyers and sellers so that they can do the auction everywhere, every time.
In 2020, AAA had more than 75,000 cars put up for auction. The auctions were arranged both in Bangkok and provinces. In 2021, new auction places are added in four provinces. Also, two parking depositories in provinces are increased in order to support an increasing number of cars put up for auction. Therefore, AAA will have depositories for cars in 25 provinces in total.
The Corporate Supporting Center. It is an important unit for offering consultation and support to MBK GROUP’s main business performance by employees with expertise and experience in diversified business. The Corporate Supporting Center attaches significance to stimulating the human resources policy and employs technology used in the organization to develop and enhance the potential and capability of MBK GROUP’s business groups in order to satisfy customers’ satisfaction by using technologies and innovations for support. Applications and systems are also used in order to increase the competitiveness and the optimum benefits, as well as building the identity and the brand of MBK GROUP to be remarkable, robust, and sustainable such as MBK Application, Customer Relationship Management (CRM), and Artificial Intelligence (AI).
For the Good Corporate Governance, the Board of Directors realizes and attaches importance of the management based on the principles of Good Corporate Governance in order that MBK GROUP grows steadily and sustainably and has responsibility for the society and all stakeholders. In 2020, the Group was assessed for the Corporate Governance of its listed companies at “Excellent” level or 5 stars. It has been assessed at “Excellent” level for five consecutive years since 2016 and has also been awarded 100 full points from the assessment of holding the shareholders’ meetings by Thai Investors Association for nine consecutive years since 2012.
For the responsibility for the society and the environment, the Company realizes and attaches significance to this responsibility. Then , it has created value in collaboration with “the society and business-involved parties” by utilizing expertise of the Company in order to create value to the organization and the society in tandem through various projects and activities continuously and the instilment of employees’ awareness and consciousness of helping save the environment, cultivating the value and pride of organizing community volunteer activities as payback of their grateful feeling for the society and being part of the creation of the society of happiness. All lead to the social and environmental development for the sustainability in every aspect. Details are disclosed in this Annual Report.
Although the business profits which were generated in 2020 and continue to the year 2021 of MBK GROUP has been affected by such a crisis, by the management and policies’ adaptation to align with the situation during the crisis, the public sector’s measures to help and support the economy, and the improvement and the distribution of vaccines, the economy will gradually recover. The Board of Directors and executives have confidence in leading MBK GROUP’s companies to overcome this crisis well and bring the Group to the stability and the sustainability in the long term.
On behalf of the Board of Directors, we would like to express our gratitude to the shareholders, customers, business partners, every party of stakeholders, executives, and employees, for your trust and good support for the business performance of MBK GROUP throughout the previous year. MBK GROUP will hold to business performance based on the principles of the Good Corporate Governance, management in a full professional capacity, and readiness to improve and enhance its strength in order to achieve success and encourage growth stably and sustainably.
Mr. Banterng Tantivit
Mr. Suphadej Poonpipat
Mr. Suvait Theeravachirakul