Thai Siam Cement Q3 profit rises 13%; chemicals earnings fall 16%

26 October 2011 11:22  [Source: ICIS news]

SINGAPORE (ICIS)--Thailand’s Siam Cement Group (SCG) on Wednesday reported a 13% year-on-year increase in its third quarter net profit to baht (Bt) 7.38bn ($240m), boosted by divestment gains, while earnings at its chemicals operations declined as feedstock costs spiked.

The company did not provide details on the divestment gains for the period.

SCG’s sales rose 19% year on year to Bt94.3bn in the third quarter of this year on the back of increased product prices across most businesses, the company said in a statement.

The firm’s earnings before interest, tax, depreciation and amortisation (EBITDA), however, fell 3% year on year to Bt10.6bn, as a result of squeezed margins in the chemicals business, it said.

SCG Chemicals saw a 16% year-on-year drop in its profit in the third quarter of this year to Bt3.23bn as a result of higher feedstock costs, SCG said.

Average prices of naphtha feedstock surged by 43.5% year on year to $956/tonne (€688/tonne) during the third quarter, boosted by higher crude oil values, the company said.                                                                        

SCG’s revenues from its chemicals unit rose by 23% year on year Bt48.8bn in the July-September period on the back of higher product prices, according to the firm.

However, the segment’s EBITDA fell by 38% year on year to Bt2.67bn in the third quarter because of squeezed margins of by-products, it said.

For the nine-month period ending 30 September this year, the chemical unit’s net profit rose by 6% year on year to Bt10.5bn, while sales increased by 38% to Bt146.7bn, the company said.

SCG operates five major businesses - cement, petrochemicals, paper and packaging, building products and distribution.

Domestic demand in the fourth quarter for the firm’s chemicals products is expected to fall on a quarter-on-quarter basis because of lower sales to the automotive industry, the company said.

“Cement and building materials [business] will undoubtedly see very weak quarter-on-quarter domestic demand from all sectors [infrastructure, residential, and commercial] in the fourth quarter of 2011, due to the heavy flooding in most provinces,” SCG said.

About a third of all provinces in Thailand are currently experiencing floods.

($1 = Bt30.81)


By: Nurluqman Suratman



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