Oil spike eats into listed firms’ profits

Total profits earned by Thai listed companies, excluding the energy sector, will likely shrink by 8.3% this year as soaring oil prices raise production costs in many industries, according to Kasikorn Securities (KS).

The brokerage expects the average global oil price to stand at US$95 a barrel in 2022, and estimates international tourist arrivals will drop by half to 1.5 million this year, from a previous estimate of 3 million, because of a fifth wave of the pandemic caused by the Omicron strain.

The tourism sector’s muted recovery will slow Thai GDP growth to just 2-2.5%, down from the previous forecast of 3.7%, the brokerage said.

However, oil refinery stocks will gain from rising crude prices. KS expects the energy sector to record 33% profit growth this year, increasing listed companies’ total profits by 1.4%.

For listed energy companies, KS recommends Esso…