A Ford vehicle being assembled at an RMAC factory located in the Krakor district of Pursat province on June 16. PHOTO SUPPLIED
RMA (Cambodia) Plc (RMAC), an automotive, heavy equipment, engineering and food services conglomerate listed on the Cambodia Securities Exchange (CXS), experienced a marked decline in business performance in the third quarter of 2023.
The downturn was attributed to the economic slowdown, adversely impacting demand in the automobile industry.
In its November 22 filing to CSX, RMAC reported a significant drop in revenue for Q3 2023. Earnings amounted to 366.7 billion riel ($89.23 million), a 53.3% decrease compared to the same quarter in 2022. Profits for Q3 2023 stood at 13.2 billion riel (3.221 million), falling by 86.5% from Q3 2022.
As of the end of Q3 2023, the company’s total assets were valued at 1.067 trillion riel ($259.6 million), representing a 19.9% increase from 889.3 billion riel ($218.8 million) as of December 31, 2022. Total liabilities at the end of the quarter reached 531.7 billion riel ($129.4 million), up 17.8% from 451.4 billion riel ($109.8 million) as of year-end 2022.
Kevin Whitcraft, chairman of RMAC, noted the global economic slowdown in 2023, with the World Bank forecasting a modest growth of 3.2%, while Cambodia’s GDP expansion has been revised down to 5%.
He highlighted the high leverage in the financial sector, with a credit-to-GDP ratio well above 100%, making it susceptible to shocks like sudden interest rate increases, which could strain household budgets and businesses.
“Our analysis shows that the Cambodian automobile sector is undergoing a substantial downturn in 2023, with a 30% reduction in sales compared to 2022. The decline stems from various factors, including the ongoing effects of the Covid-19 pandemic, global economic deceleration, rising inflation and financial sector vulnerabilities,” he explained.
Despite these challenges, Whitcraft stated that the company has maintained its leadership in the non-luxury automotive segment, with key brands like Ford and Changan. Year-to-date revenues are slightly below, with a 4% decrease from the same period in 2022, yet the company has sustained a robust balance sheet.
“RMAC is committed to offering iconic, highly sought-after products and exceptional services to our devoted customers. Our continuous investment in expanding our network of showrooms and after-sales service centers underscores our long-term dedication to the Cambodian market,” he added.
In a prior report, the company noted a 26% growth in the Cambodian car market in 2022 compared to 2021, with sales of new and used vehicles reaching around 71,000, up from 57,000 units in 2021. The new car segment saw a 43% increase to over 28,000 units, accounting for 39% of the total market, up from 34% in 2021. Specifically, new Ford vehicle sales rose by 31%.
RMAC, through its affiliates, exclusively represents and manages a range of brands, including Ford Motor Company, Jaguar, Land Rover, Piaggio, JCB, John Deere, JLG, Hako, PowerBoss, Minuteman, TCM, Megger SebaKMT, John Deere, AVIS, The Pizza Company, Swensen’s, Dairy Queen, Krispy Kreme, Bar B Q Plaza and The Coffee Club, as previously mentioned by the European Chamber of Commerce.
