Bualuang Securities’ research found that Thai list-companies earnings dropped 58% year-on-year in 4Q11, following the impact of the flood incident. The damage was concentrated in sectors exposed to insurance claims, production stoppages, supply-chain disruption and weaker travel demand.
The sharpest earnings impact came during the quarter when flooding pressure was most severe. Bualuang’s analysis showed several sectors moved into losses in 4Q11, including insurance, electronic components, transportation, automotive, finance and securities, industrial materials, and tourism and leisure.
The brokerage said the overall hit to the market was more limited than feared, as the earnings shock was not evenly spread across all industries. Some sectors continued to report profits, although at lower levels than a year earlier.
Property development profit declined 54% year-on-year, while media fell 45%, energy and utilities dropped 30%, banking was down 24%, and agribusiness decreased 17%.
A smaller group still delivered earnings growth despite the floods. Health care profit rose 17% year-on-year, food and beverage increased 20%, and commerce expanded 42%, reflecting differences in each sector’s exposure to flood-related disruption.
Bualuang used 3Q11 earnings as a pre-flood benchmark, setting that period at 100, then compared recovery rates from 4Q11 onward. A reading of 100 or higher indicated that sector earnings had returned to, or exceeded, the pre-flood level.
On that basis, total SET earnings dropped to 44 in 4Q11, meaning profits fell 56% from the pre-flood benchmark. The index-level recovery was rapid in the next quarter, with total earnings rebounding to 132 in 1Q12, although the recovery was uneven across sectors.
The fastest recoveries were seen in sectors that returned to pre-flood earnings within one quarter. These included tourism and leisure, health care, transportation, commerce, electronic components, media and banking, based on the recovery table.
Property development and automotive required two quarters to regain pre-flood earnings levels. Insurance was the slowest to normalise, taking five quarters, as claims costs weighed on the sector for longer than most other groups.
Bualuang’s conclusion was that the 2011 floods caused a temporary earnings disruption for many listed sectors rather than a broad long-term shift in profit trends, with insurance standing out as the most delayed recovery case.
