Seafco Public Company Limited (SEAFCO) has posted a shocking 77.23% decline in profit from 102 million baht in 3Q19 to 23 million baht in 3Q20., leading to a question “What happened to SEAFCO?”
The operation result for the period showed that since an unprecedented outbreak in early this year, the Covid-19, SEAFCO has been struggling with a labor shortage.
As of the aforementioned reason impact, SEAFCO’s revenue dropped 30.84% to 525 million baht from 759 million baht a year ago, and Gross Margin of the three-month period in year 2020 was11.33% compared with 20.85% in 2019.
Meanwhile, cost of hire of work, sales of materials and services decreased 22.52% YoY to 465.75 million baht and administrative expenses and Financial Cost decreased 11.08% YoY to 34.69 million baht.
As a result, the net profit of SEAFCO in the nine-month period was 189.62 million baht, decreasing 41.56% YoY
With the condition of labor shortage, it was expected that other stocks in the construction sector such as Pylon Public Company Limited (PYLON), Unique Engineering and Construction Public Company Limited (UNIQ), Ch. Karnchang Public Company Limited (CK), Italian-Thai Development Public Company Limited (ITD) and Sino-Thai Engineering and Construction Public Company Limited (STEC) would be under the same circumstances.
Thailand is gradually easing lockdown measures and already has allowed migrant workers from Cambodia, Lao PDR and Myanmar to return to Thailand with a mandatory 14-day quarantine regulations, however, with a severe ongoing outbreak currently in neighboring countries, it would lead to a worsening labor shortage.
Well, this year might not be a good year for construction sectors, pressured by economic slowdown, 2020 budget delay, Covid-19 pandemic and labor shortage.