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Phnom Penh Special Economic Zone posts $680K Q1’22 net loss

Harrison White

Publicly traded Phnom Penh Special Economic Zone (CSX:PPSP) has posted an after-tax loss of $680,743 down from the net profit of $12,201 over the same period last year. The company posted an annual after-tax profit of around $1.9 million in 2021.

In a report submitted to the market Non-Executive Chairman Kith Meng commented that in the first quarter of 2022, the Company reported total revenue of $4.44 million, an increase of 152% year-on-year compared to the amount of $1.75 million in the first quarter of 2021.

PPSP stock is down from KHR 2,860 a share in its 2016 IPO and is currently trading at KHR 2,470 a share with a market average price-to-earnings ratio of 21.48.

PPSP revenue streams have been changing with the majority of 2022 first-quarter revenue derived from construction revenue around 57% and services rendered around 28% with no revenue made from land sales.

This change in revenue is according to the company’s long-term strategy – in comparison land sales made up over 55% of the company’s total revenue in the first quarter of 2021.

Long-term legal dispute resolved

A two-year-long arbitration case brought by energy provider Colben Energy Holdings (PPSEZ) Ltd and Colben System Plc Ltd (“Colben”) also ended in the first quarter with Colben withdrawing its initial $14.4 claim and the Arbiter in the case ruling that PPSP had no basis for a counterclaim of breach of confidentiality.

According to official documents, Colben will be required to pay approximately $467,000 to reimburse PPSP for costs incurred in defending against the initial claim while PPSP must pay approximately $78,000 to Colben for defending against the PPSP counterclaim.

A group tour of delegates consisting of members of the Cambodia Chamber of Commerce, potential business partners, and service providers to visit Phnom Penh Special Economic Zone.

Both parties will be required to share arbitration costs of around $84,000 with Colben paying 75% and PPSP 25%. Both parties will have 30 days to pay before incurring interest penalties of around 5% per annum. To read more about the legal dispute click here.

Royal Group takes majority ownership 

Earlier this year, Inter Logistics (Cambodia), a subsidiary of Royal Group bought Oknha Lim Chhiv Ho’s majority stake in the company – purchasing 45.09% of shares worth around $16 million.

In a statement released to the market at the time Kith Meng Chairman of the Royal Group of Companies and Inter Logistics (Cambodia) said the investment would bring more new technology systems, management, and business strategies, and investors.

Other major shareholders include JWD Infologistics PCL (14.61 percent), Zephyr Co Ltd (14.17 percent), and Ng Lian Soon (9.04%). To read more about the ownership structure of PPSP click here.

In response one of the key events of the quarter was cited as a group tour of delegates consisting of members of the Cambodia Chamber of Commerce, potential business partners, and service providers to visit Phnom Penh Special Economic Zone.

“One main purpose of the visit was to show everyone how the zone is being operated, and to show the current development and achievement, as well as to create a chance to get to know each other for future possible collaboration between the zone developer and other related businesses,” Ming stated in the report.

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