UpdateThai SCG Q1 net profit falls 35% on weak chemical margins

25 April 2012 11:32  [Source: ICIS news]

(adds details, analyst comments in paragraphs 7-10)

SINGAPORE (ICIS)--Thailand’s Siam Cement Group (SCG) said on Wednesday its net profit in the first quarter of 2012 fell 35% year on year to Thai baht (Bt) 5.97bn ($193.1m) on the back of weak chemical margins.

It said that chemical margins troughed this year because of “the global excess supply and global demand weakness”, the company said in a statement.

SCG’s overall earnings before interest, tax, depreciation and amortisation (EBITDA) declined by 24% year on year to Bt10.3bn, despite an 11% growth in sales to Bt102.9bn, it said.

Its overall sales were boosted by higher volume growth and higher product prices in most business units, the firm added.

For its chemicals business, net profit in the March quarter slumped 74% year on year to Bt1.24bn, with EBITDA down by 82% at Bt894m, SCG said.

Sales from its chemicals unit – the company’s largest revenue generator in the first quarter – rose by 9% year on year to Bt52.9bn, it said.

It said that its average ethylene price stood at $1,251/tonne in the first quarter of 2012, up $12/tonne on a year-on-year basis. 

For propylene, its average price fell by $98/tonne year on year to $1,281/tonne over the same period, citing weak demand for downstream polypropylene (PP) products, the company said.

SCG’s combined sales volume of polyethylene (PE) and PP rose by 9% year on year to 433,000 tonnes in the first quarter of this year, SCG said.

“Earnings of SCG should recover in the second quarter of this year as reflected in improving chemical spreads in April while demand of cement remains healthy,” said Naphat Chantaraserekul, a Thailand-bsaed analyst with DBS Vickers Securities.

($1 = Bt30.9)

By: Nurluqman Suratman

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