MD & A

Operational overview

In January, Charn Issara Residence Co., Ltd. (subsidiary “CIR”) launched The Sky Series project, a 4-unit luxury villa project worth 1,000 million baht located in the Sri Panwa Phuket project area.

In April, Sri Panwa Management Co., Ltd. (subsidiary “SPM”) received approval from the trust to postpone the payment of the rental fee for the second investment asset in the trust in the amount of 108.44 million baht according to the rental payment plan, which is scheduled to be paid between April 2024 and December 2028.

In May, the company registered Issara Naporn Co., Ltd. (subsidiary “ISN”) with a registered capital of 100 million baht. ISD called for payment of shares in May in the amount of 70 million, of which the company holds 59.99 percent, to be a real estate development company for residential projects under the Sri Panwa Lagoon project. It is also registered Issara Wipaphon Co., Ltd. (subsidiary “ISV”) with a registered capital of 50 million baht. ISV called for payment of shares in May in the amount of 25 million baht, of which the company holds 49.99 percent to be a real estate development company, residential houses under the Sri Panwa Place project.

In August, the company issued 2 sets of debentures, 1st set with a term of 1 year and 6 months, worth 209.10 million baht, and 2nd set with a term of 2 years and 6 months, worth 400.50 million baht, to repay the original debentures.

In December, Bang Bok Real Estate Investment Fund, in which the company holds 17.56 percent of the investment units in the fund, was converted into an Issara Real Estate Investment Trust and exchanged the investment units into the original fund with Issara Trust units on December 3, 2024.

Performance Results

Income

Charn Issara Development Public Company Limited and its subsidiaries had total revenue from operations in 2024 of 2,942.56 million baht, an increase of 691.81 million baht or 30.74 percent from 2023. The change in revenue was due to revenue from the sale of real estate in 2024 of 1,705.16 million baht, an increase of 910.97 million baht or 114.70 percent from the previous year due to the transfer of ownership of condominium units in The Issara Sathorn and Sasara Hua Hin projects, which were completed in late 2023 and have begun to transfer ownership to customers continuously, housing estates in the Baan Issara Bangna and Issara projects Residence Rama 9. While in 2023, the Company had a profit from changing the payment period of the past outstanding rental of the Sri Panwa Hotel 2 property lease agreement of 32.4 million baht from receiving approval to postpone the payment of the rental of 184.5 million baht by paying in installments of 60 installments until July 2028. The Company had a profit from receiving an exemption of the rental fee of the Sri Panwa Hotel 1 and 3 property funds from the Sri Panwa Hotel Real Estate Investment Trust (REIT) of 42.3 million baht from being able to comply with the conditions set by REIT, and had a profit from changing the lease agreement of 116.1 million baht from canceling the lease of the Sri Panwa Hotel 2 property from REIT because the lease agreement had expired and SPM did not wish to renew the lease agreement with the same conditions.

Gross Profit

The Company had a gross profit margin from the sale of real estate in 2024 of 31.27 percent, which was an increase of 1.52 percent from 2023. The increase in gross profit margin was due to the transfer of ownership of condominiums, especially largesized units of the Company.
The Company had a gross profit margin from the office rental and service business in the Charn Issara Tower 1 and 2 buildings and units in the Issara Lad Phrao Condominium in 2024 of 43.93 percent, an increase of 8.23 from 2023 due to the gradual increase in rent and the electricity charge rate from the increase in the FT rate.
The Company had a gross profit margin from the hotel business in 2024 of 24.61 percent, which was an increase of 2.12 percent from 2023 due to the Company's better cost management and recognition of lower rental costs under the investment property lease agreement in Sri Panwa Hotel 2 due to the request for a change in the terms of the lease agreement. This resulted in a better gross profit margin from the hotel business.
The Company had a gross profit margin from sales of goods in 2024 of 4.34 percent, which was slightly lower than in 2023 by 0.50 percent, mainly due to the volatility of oil prices.

Expenses

Distribution and administrative expenses in 2024 were 736.15 million baht, an increase of 13.46 percent compared to 2023. The main reason for the increase was the increase in expenses related to the sale of real estate, such as specific business tax, transfer fee and commission.
Loss from financial derivatives during 2024, the Company entered into contracts that were in the nature of financial derivatives and had to be measured at fair value, which the contract value was higher than fair value, therefore, a loss of 30.1 million baht had to be recognized.
Finance expenses in 2024 were 418.68 million baht, an increase of 5.33 percent compared to 2023 because some of the Company's projects were completed in 2024, so such finance expenses could not be recognized as part of the construction cost in addition to the increase in interest rates during the year.

Net profit / (loss)

The Company had an operating loss in 2024 of 289.90 million baht, with a net loss attributable to shareholders of the Company of 264.36 million baht, and a loss reduction of 71.51 million baht compared to 2023, resulting in a net loss attributable to shareholders of the Company per share of 0.2478 baht per share.

Financial status

Assets

As of December 31, 2024, the Company had total assets of 10,849.69 million baht, a decrease of 1,970.38 million baht or 15.37 percent from December 31, 2023, mainly due to a decrease in the cost of real estate development projects for sale of 816.6 million baht. During the year, the cost of real estate development projects for sale decreased by 816.6 million baht from the transfer of ownership of real estate, mainly condominium units, The Issara Sathorn condominium project, Sasara Hua Hin project, Baan Issara Bangna project to customers during the period and the transfer of land classification in The Issara Chiang Mai Phase 2 project and some land in Phang Nga province as land awaiting development, net of the development cost of the Baan Issara Bangna project and new projects under development. The Company has restricted bank deposits, decreased by 994.5 million baht from the Company's repayment of debentures. Due in the amount of 950.0 million baht on January 2, 2024, property, plant and equipment decreased by 262.5 million baht from the depreciation of buildings and equipment, net of building renovations and purchases of materials and equipment during the period. In addition, during the period, the accounting classification was transferred by transferring land to real estate development costs of 33.2 million baht and reversing the revaluation of land of 116.0 million baht from the accounts, even though the Company's investment in associates increased by 54.4 million baht from the investment in Good Neighbors Biotechnology Co., Ltd. and Issara Naporn Co., Ltd., net of the recognition of losses during the year of the associates. Right-of-use assets increased by 32.8 million baht from the recognition of assets under lease contracts in SPM 2, net of the amortization of assets under the right-of-use during the period. And land awaiting development increased by 106.6 million baht from the transfer of land classification of The Issara Chiang Mai Phase 2 project and some land in Phang Nga Province from the cost of real estate development for sale because the Company has delayed the construction of the project.

Liabilities

As of December 31, 2024, the Company had total liabilities of 8,600.88 million baht, a decrease of 1,603.50 million baht or 15.71 percent from December 31, 2023, mainly due to a decrease in debentures of 847.10 million baht, trade and other current payables of 920.6 million baht from payments for construction work, land costs, and rental payments under the SPM2 lease agreement, which was approved to postpone rental payments in the past during the year, and loans from other companies of 290.3 million baht from repayments of loans under the agreement when the Company transferred ownership of real estate to customers. Even though loans from financial institutions increased by 346.5 million baht and loans from related persons and businesses increased by 184.8 million baht from real estate development for sale during the year, such as the Sasa Hua Hin condominium project, the Independent Bangna housing project, and new projects under development, along with during the year. Lease liabilities increased by 52.0 million baht from the recognition of lease liabilities in SPM 2, net of rental payments under the contract, especially the lease of real estate in Sri Panwa Hotel.

Shareholders' Equity

As of December 31, 2024, the Company had total shareholders equity of THB 2,248.81 million, a decrease of THB 366.88 million, mainly due to the recognition of losses during 2024 and the recognition the devaluation of the Company's non-current financial assets.

Issuance of debt securities with an obligation to maintain financial ratios

Is there an issuance of debt securities with an obligation to maintain financial ratios? : Yes
Can the Company maintain the financial ratios as reported? : Yes

Financial conditions of the issuance of debt instruments The issuer of the debentures will maintain the ratio of "interest-bearing debt" to "equity" (Interest-Bearing Debt to Equity Ratio) at a ratio not exceeding 3.75:1 (three point seven five to one) as of the end of the quarterly accounting period or the end of the fiscal year of the issuer. Specifically, debts that are subject to interest payments (excluding debts under lease contracts) according to the consolidated financial statements of the bond issuer according to the figures appearing in the quarterly consolidated financial statements or annual consolidated financial statements of the bond issuer.

As of the end of the annual consolidated financial statements, the Company can maintain the financial ratios.