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Rising energy prices undermine corporate profit margins: IMA Asia

On January 26, 2021, an electric pylon can be seen in front of the cooling tower of the coal-fired power plant of German energy giant RWE in Weissweiler, western Germany.

Fassbender | AFP | Getty Images

A management consultant said on Wednesday that rising energy prices would increase operating costs and narrow profit margins for companies around the world.

Prices for energy commodities such as oil, natural gas and coal have skyrocketed in recent weeks as supply remained tight and demand recovered from a slowdown due to Covid.It contributes to the shortage of electricity and fuel from Europe NS Asia..

Richard Martin, Managing Director of IMA Asia, told CNBC:Squawbox Asia.. “

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India, China may be at risk

Martin said US companies are more likely to protect their profit margins because of the “very vibrant” consumer market, adding that they can raise selling prices quickly.

But people in other countries are facing a darker outlook, the consultant said.

“In many countries of the world, there isn’t a very vibrant consumer market. China is one of them, and in fact, many East Asia are in that region. As costs go up, profit margins go down.” Stated. Martin.

India is also at risk. Martin said India’s stock market is collapsing, but South Asian countries will have a hard time passing costs on to consumers.

Rising energy prices undermine corporate profit margins: IMA Asia

Source link Rising energy prices undermine corporate profit margins: IMA Asia

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