ASEAN consumer companies' profit growth to double to 13.6% in 2018

Companies have been battered by higher costs and slower sales in 2017.

The year ahead is one of recovery for ASEAN consumer companies as earnings growth are projected to double to 13.6% in 2018 after a bleak year of low margins and slow sales, according to Regional Industry Focus from DBS Group Research.

Improving macro-economic outlook is expected to translate to a more positive consumer sentiment which in turn will boost consumption levels in 2018 with Thailand, Indonesia and Philippines projected to lead the pack.

Singapore recorded a disappointing year in 2017 after posting higher-than-expected operating costs and slower sales as manifested by Courts Asia and Delfi’s sluggish quarterly performance. 

Indonesia similarly recorded a dismal year after aggregate revenue growth declined 12% YoY in Q3 due to weak commodity price environment, higher electricity tariff for households and slow government spending. 

On the other hand, consumption levels are projected to rally in Thailand as the mourning period for the deceased King Bhumibol Adulyadej has ended.

The Philippines’ dry spell is also poised to come to an end as Universal Robina Corp may be looking for a recovery play in the year ahead. 

“After a year of relative underperformance and relative cautiousness, we see a more optimistic 2018 for the consumer sector. This is marked by lower base effects, expectations of further improvement in consumer sentiment coupled with stimulus and margin improvement on lagged effects of lower soft commodities prices seen this year,” said DBS Group Research.

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