The 50 percent drop in revenue of the Phnom Penh Special Economic Zone (PPSEZ) recently announced for the first nine months of the year is due mainly to a significant decline in land sales, a senior official said yesterday.
According to the initial, un-audited revenue statement from January to August, total revenue was $7.24 million, a 50.33 percent drop from the same period the year before.
But this is nothing to be alarmed about, Investment Relations Manager Ardisak Boeprasert told Khmer Times yesterday, noting that last year’s revenue was greatly boosted by non-recurring land sales.
“Our business model is different from manufacturing houses in the way that loss of sales doesn’t impair the asset value. Our total asset value strongly increased to $54.29 million, compared with $48.4 million at the end of 2015,” Mr. Ardisak said.
“There are positive signs in the financial results. We continue to successfully increase recurring revenues, from services rendered and rental income, to $2.21 million, a slight increase of 5.8 percent,” he said, adding that in the first nine months of 2016, gross profit margins had increased by almost 10 percent, to 69.39 percent.
Svay Hay, the CEO of brokerage firm Acleda Securities, told Khmer Times on Wednesday that the Cambodian Stock Exchange (CSX) listed PPSEZ’s long-term investors will not be concerned by the revenue fall announcement.
“The periodic market may influence, in some aspects, the stock price. However, income approach investors are viewing longer term [prospects],” Mr. Hay said, commending the PPSEZ on its transparency.
The PPSEZ became the fourth company to be listed on the CSX in April, with investors at the time noting that its revenue was highly dependent on land sales for revenue. Its listing raised $8.2 million to develop a 53-hectare special economic zone in Poipet, near the Thai border.
Construction is still underway and the first sales of factory space are expected in March, Mr. Ardisak said.
“This industrial zone will be attractive to Thai business owners since the recent announcement of Thai national policy. Thailand 4.0 is structured to convert the country, which is now losing labor cost competitiveness, into a value-based economy through adopting new business models and technology,” he said.
“Therefore, Thai labor-intensive manufacturers tend to seek over-the-fence locations with competitive labor sources, like Poipet,” he added.
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