It’s clear that Ocean Commerce Public Company Limited or OCEAN is fully transforming from plumbing business to palm oil business after announcing to stop selling faucet and plumbing equipment from November 1, 2019.
That means the end of the plumbing business legend completely.
Ocean started with selling faucet and plumbing equipment but recently this business suffered a blow from Chinese rivals, which made the company continuously report a loss.
In 2015, OCEAN reported that had 296 million baht total revenue but had a gross loss of 3 million baht. In 2016, its total revenue was at 331 million baht with 1 million baht gross profit. In 2017, Total revenue was at 294 million baht while a gross loss was at 32 million baht. In 2018, its total revenue was at 613 million baht with 146 million baht gross loss.
These poor performances makes “Wilailertphoka” group as a major shareholder and its management team to seek for the resolutions seriously. Eventually they found Lamair Palm Oil Group of Chatchaya Tritrakulchai to rescue the crisis when the latter offered to increase the capital.
After getting new capital, OCEAN makes a new shareholder structure with Chatchaya and the Tritrakulchai family to be the new major shareholders, while Wilailertsopa group gradually sold their shares.
The old management teams slowly stepped down after the reorganization and the Lamair Palm Oil Group came to sit in the whole new board. After that, OCEAN reduced plumbing business to move completely into palm oil business, which the Lamair Palm Oil Group was good at.
The latest closing of faucet and plumbing business occurred after the company stopped making faucets since last April.
If focusing on faucet and plumbing business, its revenue continuously lowered from 307.60 million baht in 2016 to 277.30 million baht in 2017 and to 289.70 million baht in 2018, or 3% annually on average lowered.
OCEAN said plumbing business has to hire a lot of workers which accounted 20-25% of cost. That was the reason why the company decided to close it.This marked as a permanently closing the tap!
The next shot to be focused is whether palm oil business can save face for OCEAN. If looking at this year’s performance, it’s a little bit more at ease.
In the second quarter, OCEAN turned to have a gross profit of 20 million baht, increasing 173.44% compared to losing 28 million baht in the year earlier, which results to the gross profit in the first half to report at 21 million baht, increasing 171.08% from 30 million baht loss in the year earlier.
Although it’s merely a thin profit but it’s considered to be a good signal. Let’s hope that the third quarter’s earnings ,announced soon, will be good as well.
However, OCEAN’s share price is still going into a free fall. Looking back to the late 2018 (after Chutchaya becoming a major shareholder), the share price extremely hit to 6 baht but after that it steady lowered to standstill at more than 1 baht, with a thin turnover.
Where is big boss “Chatchaya”? Why does she let OCEAN to fall in this situation? She ought to recover investors’ thrust because if it is left like this, OCEAN will transform to be rotten share without attention. Don’t cry out that nobody sends a warning.
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