Royal Railway Plc (RRC), a Royal Group of Companies Ltd (RGC) member with a corporate bond listed on the Cambodia Securities Exchange (CSX), reported only a slight on-year increase in revenue in the first quarter of 2023 – ended March 31 – which has been blamed on economic strain brought about by the prolonged conflict in Ukraine.

In a filing to the CSX last week, RRC posted total revenue of 12.736 billion riel ($3.1 million) for the three-month period, up 0.12 per cent year-on-year, and net profit of 2.553 billion riel, compared to a net loss of 1.555 billion riel a year earlier.

As of March 31, total assets and equity stood at 148.969 billion riel and minus 6.667 billion riel, versus 154.833 billion riel and minus 9.344 billion riel as of December 31, 2022.

“Thanks to the Royal Government of Cambodia’s introduction of the ‘Living with Covid-19’ strategy in late 2021 after the success of swift and high vaccination against Covid-19, Cambodia’s economy was recovering well in the reporting period,” RRC and RGC chairman Kith Meng said in the filing.

“The World Bank forecasts economic growth of 4.8 per cent in 2022 thanks to a rebound in tourism and the resilience of garment industry, freight service and footwear exports. Total international visitor arrivals have steadily increased.

“Business and consumer confidence have risen and both domestic and foreign investment have increased. Economic growth is projected to accelerate to 5.2 per cent in 2023.

However, Cambodia’s economy is particularly vulnerable to rising inflation, slower global economic growth, decreased availability of energy supplies, and higher interest rates.

“Amid the challenging business environment, RRC has played its essential part in contributing to sustainable economic development through continuing engaging the new clients for the freight service with very reasonable price to fit with the change[s] of the economic environment.

“In this quarter, RRC actively promoted it[s] passenger train service which developed around the idea of spending the national public holidays by taking a very memorable train journey to the North and South of the country,” he said.

Total revenue managed to edge up marginally on the back of the Northern Line’s increased utilisation by the rail freight industry as well as improved ridership during the first quarter, he added.

“As part of the listing incentives, the company submitted a letter to SERC [Securities and Exchange Regulator of Cambodia] on 16 December 2022 requesting to waive all tax liabilities from the General Department of Taxation (GDT).

“On 8 February 2023, the company received a notification from SERC that the request was submitted to the GDT. On 29 March 2023, the tax waiver request was granted to the company by the GDT, amounting to $1,842,973. This is another milestone thus far,” Meng said.

Meanwhile, RRC is collaborating with three other companies to repurpose vacant land next to 300km of railroad tracks, with an emphasis on agriculture and renewable energy (RE).

A memorandum of understanding (MoU) was signed to this end at an April 28 ceremony between RGC, Samaiden Energy (Cambodia) Co Ltd, Management Venture Asia (Cambodia)

Ltd, and Panna Energy Sdn Bhd pertaining to a feasibility study for the development of the land, spanning from Poipet town to Preah Sihanouk province.

The project focuses on micro ground mount solar installations, utilities, and facility infrastructure for rental, and aims to promote sustainable economic activities such as paper tree planting as well as soybean and greenhouse vegetable farming.