thegreglowe.com

By GREG LOWE
IN BANGKOK

THAI-LISTED companies saw net profits surge by 42 per cent last year to 446.51 billion baht (S$19.13 billion) on sales totalling 6.39 trillion baht, the Stock Exchange of Thailand (SET) says.

The top-performing industry groups were resources, finance, and property and construction respectively, with PTT, Siam Cement, PTT Exploration and Production, Bangkok Bank and Siam Commercial Bank as the five most profitable firms.

‘The strength of business sectors and the firms’ ability to adjust their strategies resulted in the companies’ improved operating performance,’ said SET president Patareeya Benjapolchai.

Companies on the SET100 Index posted net profits of 391.02 billion baht, accounting for 88 per cent of listed firms’ net profits, up 46 per cent year on year. Total sales dropped by 16 per cent, but gross profit margins increased to 19 per cent from 16 per cent from a year earlier due to the falling cost of sales.

The resources group, consisting of the energy, utilities and mining sectors, recorded net profits of 158.51 billion baht, a 77 per cent increase over the previous year.

The financial group, comprising the banking, finance and securities and insurance sectors, recorded net profits of 101.38 billion baht, up 12 per cent year on year.

Net profits for the property and construction group totalled 68.24 billion baht, a 54 per cent increase over 2008.

Four of the five remaining groups, excluding non-performing groups, posted profits: technology, 37.37 billion baht (16 per cent); services, 35.87 billion baht (88 per cent); agro and food, 29.62 billion baht (63 per cent); and consumer products, 6.95 billion baht (40 per cent).

The industrial group’s net profits plunged by 50 per cent from 2008 to 6.17 billion baht, due to a 13.37 billion baht loss in the industrial materials and machinery sectors.

Firms listed on the Market for Alternative Investment recorded net profit of 2.22 billion baht last year with total sales of 49.81 billion baht, a 26 per cent and 12 per cent drop over 2008, respectively.

‘The economic recession decreased total sales and net profits of MAI-listed firms in 2009, comparing to previous year,’ said MAI president Chanitr Charnchainarong. ‘However, in the last quarter of 2009, MAI-listed firms’ nets profits rose 69 per cent.’

The results for listed firms held few surprises, said Supavud Saicheua, head of research at Phatra Securities.

‘Thai companies weathered the global slowdown well,’ he said. ‘In part, the companies had a strong balance sheet to begin with and the Thai banks are very well capitalised.’

He said strong earnings growth was forecast for listed companies this year, especially in the banking, property and energy sectors.

Politics remains a risk, as does the country’s reliance on exports to fuel the recovery. The ending of fiscal stimulus in major trading partners could be a concern for the sustainability of Thai economic growth next year, he said.

The suspension of more than 50 industrial investment projects worth hundreds of billions of baht in Rayong province’s Map Ta Phut district will weigh heavily on the market if the deadlock is not resolved within the next year, said Porranee Thongyen, head of research at Asia Plus Securities.

‘Political risk will continue to affect the stock market,’ she said. ‘It raises concerns over Thailand’s economic outlook. We predict gross domestic product growth of 3 per cent this year.’

Phatra Securities maintains an underweight position on the telecom sector following the Supreme Court’s decision to seize 46 billion baht in assets belonging to the family of former prime minister Thaksin Shinawatra for abusing power while in office.

‘The political risks are real but difficult to quantify,’ said Dr Saicheua. ‘In general, we are out of consensus in believing that Thailand’s political divisions are real, deep rooted and will take years to resolve.’

Published March 8, 2010
© The Business Times