Although the global and regional economic uncertainty stemming from the geopolitical competition and the ongoing Russia-Ukraine war has affected the Cambodian economy, locally-owned Growth Board’s DBD Engineering Plc reported steady business performance in the second quarter ended June 30, 2023 (Q2 2023).

According to DBD’s filing with Cambodia Securities Exchange on August 18, total revenue for the quarter was 28.6 billion riel, which increased 139.2 per cent from 12 billion riel in the same quarter of 2022.

The company reported a comprehensive income of 1.7 billion riel for Q2 2023 compared to a comprehensive loss of 3.7 billion riel in the same quarter of 2022. Total assets rose 12.3 percent to 68.2 billion riel from 60.8 billion riel last year.

Neang Vithy, DBD chairman and executive director said the firm has two sources of revenue, consisting of construction, which is its main source including repair and maintenance work, and sale of materials, which is a smaller contributor to total revenue.

However, revenue from sales is expected to increase after the company expands its ducting production, he shared, adding that DBD plans to sell this product, which is currently only produced to supply its own construction projects.

He said revenue from maintenance and construction in the second quarter of 2023 climbed 99.4 per cent to 28.6 billion riel compared to 11.9 billion riel while the revenue from the sale of material was around 51 million riel compared to 73 million in the second quarter of 2022.

“As of Q2 2023, DBD’s revenue from sale of materials has decrease significantly, but there is an increase in revenue as DBD completed some project such as Tenant Market Place, Tenant Food Court, Tenant Paradise, Decathlon Aeon 3 and Tenant CMRT Office. In this quarter under review, DBD also got some new projects which is also a reason for the increasing revenue,” he stressed.

Leang Meng, group president of local conglomerate Chip Mong Group said at a forum on August 11 that the slowdown of the sector was because most local investors have been investing in the construction sector as it helped them make “easy profits”.

But the global economic uncertainty which affected their cash flow has led to an oversupply in the sector.

He also noted that “some people were buying a lot”, seeing it as an opportunity to earn “high profits” but when they experienced a cash flow problem, it created problems in the sector.

“For me, [as] a major investor in the real estate sector, there are about six projects that I am working on. Do I still sell? Of course, I still can sell but only a reduced amount.

“The [unit sale] decreased compared to before, and those who bought my units in my projects are to live in not to be retained and sold later to make a profit,” he said.

He predicted that the sector would not recover soon as it is still facing some challenges and would remain slow until later next year.

According to CBRE’s Mid-Year Review 2023, the Cambodian market has been grappling with the repercussions of global macro-economic changes, weakened Chinese demand as well as an oversupply of projects.

Phnom Penh’s office sector is poised to see a considerable expansion in 2023, with an estimated 215,000 square metres of office space expected to be added. The average occupancy rate has decreased to 58 per cent in the first half of 2023 from 60 per cent in the same period last year.

Office rents in both central and non-central business districts have increased between two per cent and four cent in the first half of 2023 from the second half of 2022.

The residential real estate market faced a tough first half in 2023, with intensified competition and weakened demand while several condominium and landed property projects in prime locations managed to maintain or see a slight growth in their asking price.