Logo of Phnom Penh Post newspaper Phnom Penh Post - Profit margins trend downward at bourse

Profit margins trend downward at bourse

Content image - Phnom Penh Post
A graphic shows an average net profit margin in percentage of CSX's listings. Prepared by Leang Phannara

Profit margins trend downward at bourse

The Cambodia Securities Exchange (CSX) has shown gradual declines in average net profit margins of its five listed companies over the past three years.

Net profit margin – the ratio of net income to total revenue – is an important indicator of the financial health of a business.

The average net profit margin of all listed firms was 19.4 percent in 2015, before shrinking to 14.5 percent last year.

CSX’s Listing and Disclosure Department director Lamun Soleil said on Thursday that the decreasing trend of profit margins showed weaker performance compared to past years, but the level wasn’t worrying.

Soleil said that if the decline in net profit margins is impacted by each company increasing its expenditure for expansion, it will prove beneficial in the long run. “It is not good to see a decreasing trend, but a net profit margin above 10 percent is already good,” he said.

A CSX press release on Thursday showed that Phnom Penh Autonomous Port was the only listed firm to show an increase in profit margins over the past three years.

CEO of RHB Indochina Securities Iv Ranarith said the two factors affecting net profit margins include changes in revenue and a company’s expenditure.

He said that while each company’s revenue reports were increasing, the fall in profit margins is not a concern.

“If it falls below 10 percent, it could be an alert, but if it can maintain 15 percent, it is already a good level for business,” he said.

MOST VIEWED

  • Chinese ‘prank’ threat video is no joke for Cambodia

    ‘Preah Sihanouk province, in the next three years, whether safe or chaotic, will be under my control,” declared a Chinese man in a white T-shirt, as another 19 men stood behind him shirtless, in a video that went viral on social media last month. After the

  • Woman detained for murder of hairdresser over unpaid $1K debt

    A woman has been held in connection with the murder of a 40-year-old widow. The victim’s daughter claims the motive was the suspect’s unpaid four million riel ($1,000) debt to her mother. The 17-year-old girl, Pich Sievmey, said her mother, Koem Yaneang, a hairdresser

  • ABA reports $71.8M net profit

    ABA Bank, a member of the National Bank of Canada group, recorded a net profit of $71.8 million last year, up 55 per cent from $46.2 million in 2017, its annual report released on Monday stated. A rise in the bank’s loan portfolio and the expansion of stated

  • ‘Life goes on’ if Cambodia loses Everything But Arms

    Cambodia's business sector is exploring ways to mitigate any fallout from a possible loss of access to the EU’s Everything But Arms (EBA) agreement as talks continue before the 28-member bloc makes a final decision. The EU monitoring process is set to conclude in