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Firms listed on The Stock Exchange of Thailand (SET) recorded a combined net profits of THB150.65 billion (approx. USD4.85 billion), a 30.25% year-on-year (y-o-y) rise and a 17.60% quarter-on-quarter (q-o-q) rise, due partly to gains on foreign exchange rates and investment. However, signs of slowdown in operating profit were detected in certain industrial groups, although overall financial indicators confirm their financial and liquidity strength. At the same time, fund-raising continued to improve, as a result of economic expansion and accommodating capital market conditions.
In Q3/2010, firms reported an increase in sales and services totaling THB1,805.03 billion (approx. USD58.23 billion), a 6.72% y-o-y increase, according to the SET Note Quarterly Corporate Update for Q3/2010. The slightly drop of cost management efficiency with the rising cost to income ratio from 90.49% to 91.43% resulted in the 3.85% q-o-q drop in operating profits to THB154.72 billion (approx. USD4.99 billion).
However, foreign exchange and investment gains as well as the increase of interest rates attributed to a 30.25% y-o-y increase in net profits before taxes and interest to THB150.65 billion (approx. USD4.85 billion). The net profit margin in Q3/2010 rose to 7.76%, vis-à-vis 6.56% in Q3/2009. Listed companies’ profits have been more widespread in Q3/2010 , whether compared to last year or last quarter. As of Q3/2010, 401 of 506 firms, or 79.25% of listed companies, recorded profits compared to 78.78% and 78.64% of listed firms in Q3/2009 and Q2/2010 respectively.
Listed Companies’ operational performance indicators (excluding the Financials Group) demonstrated an improvement in Q3/2010 when compared with Q3/2009, which is in line with having higher aggregate earnings. Listed companies’ return on equity (ROE) was 4.00% and return on assets (ROA) of 1.80%. Overall financial positions were stable, with the debt-to-equity (D/E) ratio at 1.15 in the latest quarter, a small drop from 1.18 seen in Q3/2009. The average interest coverage ratio was at 8.46, a significant increase from 6.36 recorded in Q3/2009.
In terms of investments by listed firms (excluding the Financials Group), the proportion of companies making additional investments in fixed assets fell to 80.48% of all listed firms, compared with 81.17% in Q3/2009. The total value of fixed asset investment in Q3/2010 was THB82.65 billion (approx. USD2.66 billion), a 17.81% y-o-y fall mainly caused by a drop in investment in the Resources Group.
Fund raising by listed companies continued to rapidly improve in Q3/2010, due to the recovery of the Thai economy and improved capital market environment. Total funds raised in Q3/2010 were THB21.71 billion (approx. USD700 million), a near-doubling rise of 97.40% y-o-y. In Q3/2010, two companies and one property fund, with the total worth of THB 1.09 billion (approx. USD35.1 million), listed on the local bourse. They were IFS Capital (Thailand) PCL (IFS), Officemate PCL (OFM), and Mercure Samui Property Fund (MSPF). A total of THB20.63 billion (approx. USD665 million) worth of funds was also raised on the SET and mai in Q3/2010, mostly by Thai Airways International PCL (THAI).
Comparing company performance in Q3/2010 with that of Q3/2009, finds a slowdown, but it was offset by foreign exchange and investment gains. As a result, net profit went up 17.60% and operational performance indicators picked up considerably from last year.
