Bangkok--3 Jun--SET
Thai listed companies’ net profit margin, return on equity (ROE), return on capital employed (ROCE), and interest coverage ratio all increased in Q1/2009 over Q4/2008, showing that as a group, they had adjusted effectively to the worldwide economic downturn. The major contribution to the improved profitability was the net rise in stock gains from commodity prices as well as highly effective cost management. Also, the debt to equity ratio (D/E Ratio) rose slightly. (These calculations covered 378 companies, excluding those in the Financials and Non-Performing Group and Property Funds.) Also, the firms had total net profits of THB55.73 billion (approx. USD1.63 billion), an increase of 151% over Q4/2008, while their fundraising jumped 49 times to prepare for economic recovery and develop operational systems to reduce costs.
Moreover, listed companies raised funds by issuing bonds or taking out long-term loans, which together increased by THB47.40 billion (approx. USD1.39 billion) from Q4/2008. They also raised over THB10.96 billion (approx. USD0.32 billion) from the capital market, a 49-fold rise over Q4/2008’s THB220 million (USD6.44 million), the Corporate Strategy & Development Division The Stock Exchange of Thailand (SET), reported in its SET Note Corporate Update for Q2/2009.
Operational efficiency of listed firms in Q1/2009 improved q-o-q. ROE reached 2.2%, a significant improvement from the (4.2) % in Q4/2008 and from its 11-year low point of (12.4) % in Q2/1999. Likewise, ROCE in Q1/2009 of 2.7% was an improvement over the (2.2)% in Q4/2008.
The average debt/equity ratio rose slightly to 1.15 in Q1/2009, up from 1.12 in Q4/2008. However, the Q1/2009 level is still lower than the 1.19 of Q1/2006. The credibility of listed firms still appears to be strong, since they can readily raise funds from loans or bonds. Meanwhile, listed companies’ interest coverage ratio increased to 4.68 from (3.12) in Q4/2008.
Net investment in fixed assets decreased in Q1/2009 over Q4/2008 by 22.6% (to THB102.43 billion, or approx. USD3.0 billion, from THB125.57 billion, or approx. USD3.68 billion.) the Q1/2009 level was still an increase of 26% over that of Q1/2008.
Most investments were in the Resources Industry Group and Property and Construction Industry Group, as they prepared for economic recovery and/or spent to increase efficiency.
In Q1/2009, four Market for Alternative Investment (mai)-listed firms raised THB545 million (approx. USD15.96 million) on the primary market and THB10.41 billion (approx. USD305.06 million) on the secondary market. Most of the funds raised were from existing shareholders (XR), totaling THB9.87 billion (approx. USD289.30 million), followed by capital raised from exercise of warrants (XE), totaling THB 538 million (approx USD15.76 million).
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