Developers' Q1 profits plunge to decade-low

Soft demand drags down performance

- KANANA KATHARANGSIPORN

The first-quarter net profit of 10 SET-listed residential developers has fallen to 3.56 billion baht, the lowest level in over a decade and less than half the five-year average, attributed to the economic slowdown and sluggish housing demand, Kasikorn Securities reported.

Sorapong Jakteerungkul, senior vice-president at Kasikorn Securities, said combined net profit fell short as expected, dropping 38% year-on-year and 51% quarter-on-quarter. The sharp decline was driven by falling top-line revenue and narrower operating margins.

"When the top-line drops, selling, general and administrative expenses rise relative to sales, eroding economies of scale," he noted.

"In some quarters over the past decade, combined profits hit 12-13 billion baht, while the five-year quarterly average was 8.3 billion baht."