Reading between the lines in the 2Q26 Management Discussion and Analysis of Samart Telcoms Public Company Limited (SAMTEL): Revenue up 14.3%. Net profit down 2.1%. Contract work is named as the reason for both 1Q26’s decline and 2Q26’s rebound.
The numbers
Contract work drives a return to growth
SAMTEL is an ICT system integrator and telecom solution provider serving government agencies and state enterprises in Thailand and Cambodia. In 2Q26, total revenues rose 14.3% YoY to Bt1,149m, reversing 1Q26’s 10% YoY decline, as revenue from sales, contract work, services and rental rose 13.4% YoY to Bt1,124m. Other income also rose sharply, up 77% YoY to Bt25m, though it remains a small share of the total.
Cost ratio still rising, net profit nearly flat
Gross margin fell to 13.2% in 2Q26, down from 15.7% in 2Q25, as cost of sales, contract work, services and rental rose 16.8% YoY against revenue growth of 13.4%. EBITDA fell 14.7% YoY to Bt192m, even as finance costs fell 66% YoY to Bt4m. Net profit fell 2.1% YoY to Bt33m, a net margin of 2.8%, against 3.3% in 2Q25.
Liabilities ease further as cash position tightens
Total liabilities fell 1.5% to Bt2,813m from Bt2,857m at FY25, driven by lower accrued project costs. Cash and cash equivalents fell to Bt557m from Bt689m at the end of 1Q26, as net cash used in operating activities widened to Bt105m from Bt42m in 1Q26. The D/E ratio rose to 0.77x from 0.71x in 1Q26, while the current ratio eased to 1.79x from 1.82x.
What the numbers don’t show
Comparing the 2Q26 MD&A with 1Q26, a couple of things stand out.
Contract work named as the swing factor behind both revenue and cost lines
The 1Q26 MD&A attributed both a 10.1% YoY revenue decline and an 8.0% YoY cost decline in the same combined line to “the decline in revenues from contract work” and a matching cost decrease. The 2Q26 MD&A attributes the reversal, a 13.4% revenue increase and 16.8% cost increase, to an increase in both. Contract work’s share of either line is not disclosed in either filing or is the reason for the swing.
Salaries and advertising named as SG&A drivers in 2Q26
The 1Q26 MD&A attributed a 1% YoY decline in selling, administrative and other expenses to a decrease in other expenses, without naming a specific cost category. The 2Q26 MD&A reports the same expense line up 8.5% YoY, now attributed to “increases in salaries and employee benefits and sales promotion and advertising expenses.” Neither salaries nor advertising costs are named in the 1Q26 filing.