Listed companies record 114% surge in profit in first half
Thai listed companies reported a 114% surge in net profits for the first half of the year, primarily attributed to a low base in 2020 when the economy was hit by the first lockdown.
However, this year's third-quarter operating results are expected to drop by 13% as the pandemic situation has continued to intensify with surges of new infections since May.
Stock Exchange of Thailand (SET) executive vice-president Manpong Senanarong said listed firms have performed well in the first half of this year with total sales of 6.06 trillion baht, up 18% from the same period last year.
Core profits also rose 118.6% to 804.95 billion baht while net profits increased 144.2% to 528.34 billion baht, compared to last year's 216.33 billion baht.
Operating profits that more than doubled during the first half of this year were driven by higher oil and commodity prices, including petrochemical products, steel, rubber and palm oil.
In addition, Thai entrepreneurs were also able to continuously adjust their business operations to fit the changing circumstances, said Mr Manpong.
Even excluding profits from the energy, utilities, and petrochemical and chemical sector, listed firms still recorded net profits with a 7.2% increase in sales, 32.2% rise in core operating profits and 54.8% hike in net profits.
In the second quarter, listed firms recorded total sales of 3.12 trillion baht, with core operating profits of 408.57 billion baht and net profits of 265.4 billion baht.
In addition, listed firms on the Market for Alternative Investments also outperformed in the first half with total revenues of 85.3 billion baht and net profits of 3.85 billion baht, up 3,881% from 97 million baht recorded in the same period last year.
Chaiyaporn Nompitakcharoen, deputy managing director of Bualuang Securities (BLS), said the outlook for the Thai stock market remains uncertain as many risk factors such as the outbreak of the highly contagious Delta variant, rapid increases in infections and the prolonged lockdown are still pressuring market sentiment.
"We expect the lockdown will continue dampening Thai listed firms' performance in the third quarter. Total revenues and profits of listed firms in the third quarter were thus estimated to be lower than the second quarter by 13% and 19%, respectively, while earnings per share will be at 84.6," said Mr Chaiyaporn.
According to BLS, other risk factors that will affect the market sentiment are the low percentage of Thai people who are fully vaccinated which now stands at only 7.3% and daily movements of the infection rate.
In addition to internal factors, external factors to monitor include the Federal Reserve's (Fed) taper of its quantitative easing expected within this year which caused the dollar to strengthen against the baht and results from the Fed's virtual annual Jackson Hole conference scheduled for Aug 26-28 expected to influence the direction of fund flows and suggest whether the funds will return to Asia and Thailand.