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SET-listed company profits projected to fall over 40% in Q3

Oct 23. 2020
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By The Nation

Listed companies' third-quarter profits are expected to drop over 40 per cent year on year, driven by the fall in tourism revenue, according to Tisco Securities.

The securities company evaluated 114 listed companies and projected their accumulated third-quarter net profit at Bt103 billion – down 42 per cent from a year earlier, but up 9 per cent from last quarter.

Tourism-related firms such as hotels and airlines would face losses from the Covid-19 fallout, while oil refinery operators would be hit by the decline in gross refinery margin, said Tisco.

It also forecasts a fall in third-quarter profits for commercial banks, due to high reserves, and energy companies, due to pressure on oil sales and prices.

Meanwhile, weak domestic purchasing power will continue to pressure retail companies.

"Profits of most listed companies will remain in negative territory, except for construction-material and electronics part firms, though these would not help stimulate the stock market much” said Tisco senior strategist Apichat Poobunjirdkul.

But fourth-quarter profits would be boosted by the return of tourists and recovering domestic consumption, he added.

"However, investors should monitor for impact on the stock market from domestic political unrest, while listed companies' fourth-quarter profit is expected to be lower than the same period last year," he said, adding that profits would rise in the first quarter of next year.

Tisco forecasts listed companies' accumulated net profit in 2020 will drop 39 per cent to Bt470 billion from Bt780 billion last year, due to the virus crisis and domestic political unrest.

"Listed companies' net profit next year will increase by 37 per cent to Bt650 billion," he added.

Asia Plus Securities' executive vice president Therdsak Thaveeteeratham forecasts listed companies' third-quarter profits of between Bt180 billion and Bt200 billion – lower than the projected average of Bt220 billion-Bt290 billion.

"However, we believe that profits have bottomed out and will gradually increase in many industries as the Covid-19 impact subsides. We also expect listed companies to be more economically active in the fourth quarter of this year," he said.

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