JAS-TRUE: The Effect of Retained Earnings

The Covid-19 pandemic has created a great economic crisis globally, prompting hundreds of stocks to decline dramatically, majority shares’ performance outlook flipped to loss, only a little amount of companies that were able to cope with market volatility. Some companies even faced not only a decline in revenue, but also a collapse in shape prices…misfortune never ever comes alone.

 

Jasmine International Public Company Limited (JAS) recorded a net loss of 794 million baht in 3Q20 as a result of the effectiveness of the TFRS 16 Leases, pushing the retained deficit to 8,622 million baht. However, JAS still recorded a profit for a separate financial statement of 2,786 million baht. 

 

With a separate financial statement’s profit, JAS at least approved a dividend payment of ฿0.20/share.

 

Looks like True Corporation Public Company Limited (TRUE), a multi-business company, is in the same boat with JAS as TrueVisions has struggled with a drop in sponsorship and advertising, meanwhile TrueMove H and TrueOnline have experienced intense competition and growth limitations, driving the retained deficit up to 73,638 million baht. Luckily, profit for the separate financial statement was 14,897 million baht, enhancing TRUE to continuously pay a dividend.   

  

JAS and TRUE are able to offer a dividend payment even in the midst of a crisis, reflecting that both companies still have retained earnings and the interim dividend payment no need to be granted the approval from Shareholders Meeting.

 

Company’s retained earnings always attract investors to speculate because underneath this condition, the share price would fall, while yield surges.