Q2 2025 Financial Analysis: Sri Trang Agro-Industry Public Company Limited (STA)
Sri Trang Agro-Industry Public Company Limited (STA) released its Q2 2025 Management Discussion and Analysis, providing a comprehensive overview of its operational and financial performance. The company, recognized as the world’s leading fully integrated green rubber company, navigated a volatile market environment marked by significant policy changes and pricing pressure.
Key Financial Metrics and Performance Trends
| Metric |
Q2 2025 |
Q1 2025 |
Q2 2024 |
YoY Change |
QoQ Change |
| Revenue (THB million) |
30,841.4 |
34,385.1 |
25,820.5 |
+19.4% |
-10.3% |
| Gross Profit (THB million) |
1,363.6 |
3,138.1 |
3,145.7 |
-56.7% |
-56.5% |
| Gross Profit Margin |
4.4% |
9.1% |
12.2% |
-7.8ppt |
-4.7ppt |
| EBITDA (THB million) |
647.6 |
2,370.1 |
2,150.7 |
-69.9% |
-72.7% |
| EBITDA Margin |
2.1% |
6.9% |
8.3% |
-6.2ppt |
-4.8ppt |
| Net Profit (Loss) Attributable to Equity Holders (THB million) |
(786.8) |
688.7 |
628.4 |
-225.2% |
-214.2% |
| Net Profit Margin |
-2.6% |
2.0% |
2.4% |
-5.0ppt |
-4.6ppt |
| Current Ratio |
2.56 |
1.98 |
2.07 |
+0.49 |
+0.58 |
| Net Debt/Equity |
0.54 |
0.71 |
0.68 |
-0.14 |
-0.17 |
Segment Performance
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Natural Rubber: Contributed 80.6% of total revenue in Q2 2025. Revenue declined 10.7% QoQ due to a 10.9% drop in average selling price, but increased 23.6% YoY from higher prices and sales volumes. Sales volume hit 397,461 tons (+0.1% QoQ, +20.7% YoY), marking the seventh consecutive quarter of growth.
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Gloves: Accounted for 19.4% of revenue. Revenue fell 8.4% QoQ but rose 5.4% YoY, largely due to a 7.9% YoY increase in sales volume, countered by lower average selling prices and currency effects. Utilization rate dropped to 75.8% from 79.4% in the prior quarter.
Historical Trends and Noteworthy Items
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STA maintained sales growth YoY, but was heavily impacted by global price pressure QoQ, especially after the US Reciprocal Tariff. The company’s gross profit and EBITDA margins dropped sharply, partially due to an inventory write-down of THB 334.2 million.
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The company’s utilization rates for natural rubber facilities improved YoY, reflecting ongoing capacity investments. Installed capacity for TSR production reached 3.72 million tons, nearing the 2026 target of 4.0 million tons.
-
Finance costs decreased 21.0% QoQ and 13.3% YoY, reflecting efficient liquidity management and reduced loan principal during the off-season.
-
Share of profit from associates and joint ventures doubled QoQ (+103.2%), driven by the high-pressure hydraulic hose business.
Exceptional Earnings and Expenses
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The quarter saw a significant allowance for inventory write-down to net realizable value (NRV) of THB 334.2 million, affecting gross profit and net profit figures.
-
A sharp drop in global rubber prices, mainly due to the US Reciprocal Tariff, was a key driver of the net loss recorded in Q2 2025.
Macroeconomic and Industry Events Impacting Performance
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The US Reciprocal Tariff induced substantial market uncertainty and price declines (TSR20 price down 14.9% QoQ), prompting buyers to adopt cautious purchasing and inventory strategies.
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Thailand’s supply recovery benefited STA from favorable weather, while Indonesia and Ivory Coast maintained or grew supply, adding further pressure to prices.
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Potential enforcement of Section 232 by the US (25% tariff on autos, auto parts, and tires) presents further risks to global demand and industry competitiveness.
Sustainability and Strategic Initiatives
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STA expanded its clean energy usage via solar power installations, reaching 42.46 MW capacity, and registered its carbon footprint across all three scopes to bolster sustainability credentials.
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The company hosted its “2025 Sri Trang Town Hall” event, emphasizing upskilling, AI-driven manufacturing, and leadership development.
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A new memorandum of understanding (MoU) was signed with Thailand’s National Research Council to promote R&D and environmental conservation in the rubber industry.
Financial Position and Liquidity
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Total assets stood at THB 108,009 million (down 17.7% from year-end 2024), mainly due to inventory reduction during the rubber wintering season.
-
Total liabilities dropped 34.7%, reflecting substantial repayment of short-term loans and improved liquidity.
-
Shareholders’ equity decreased slightly by 2.7%.
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The current ratio improved to 2.56 and net debt/equity fell to 0.54, underscoring robust liquidity and prudent debt management.
Conclusion: Financial Outlook
STA’s Q2 2025 financial performance was significantly impacted by global market volatility, notably the US Reciprocal Tariff and resultant price declines. Despite a solid YoY growth in revenue and sound liquidity supported by strong working capital management, earnings deteriorated sharply QoQ and YoY, posting a net loss driven by inventory write-downs and margin compression. However, the company’s capital structure remains strong, and ongoing investments in capacity and sustainability position it favorably for long-term growth. The outlook for the second half of 2025 is neutral to weak, given the subdued price environment and prevailing global uncertainties, though STA’s resilience and proactive management offer some mitigation.
View Sri Trang Agro Historical chart here
