UpdateThai SCG Q2 net profit falls 43% on losses from chemicals

25 July 2012 12:04  [Source: ICIS news]

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Siam Cement GroupSINGAPORE (ICIS)--Thailand’s Siam Cement Group (SCG) reported on Wednesday a 43% year-on-year decline in its second-quarter 2012 net profit to baht (Bt) 4.28bn ($134.6m) because of losses from its chemicals operations.

Its chemical business incurred a loss of Bt1.01bn in the second quarter, compared with a profit of Bt2.5bn in the same period a year earlier, partly on plant shutdowns at its affiliate - Bangkok Synthetics (BST), SCG said in a statement.

BST, which is 26%-owned by SCG, stopped production at its Map Ta Phut site on 5 May following explosions and fire that hit its butadiene rubber (BR) plant that damaged nearby facilities.

Sales in the chemicals segment were flat at Bt49.3bn in the April-June period of this year, while earnings before interest, tax, depreciation and amortisation (EBITDA) was down by 40% at Bt2.87bn, it said.

Inventory adjustments worth Bt2bn also negatively affected the chemical segment’s financial performance in the three months to June 2012, SCG said.

During the quarter, the average price of naphtha fell by $100/tonne (€83/tonne) year on year to $893/tonne, following a drop in oil prices due to the ongoing concerns about China’s economic growth and the debt crisis in Europe, according to SCG.

Ethylene prices followed the downtrend in feedstock prices, with the average price of the material down by $107/tonne year on year at $1,184/tonne, while propylene prices declined by $204/tonne year on year at $1,284/tonne, the company said.

Prices of high density polyethylene (HDPE) decreased at a slower pace to that of monomer prices at $1,387/tonne in the April-June period, while polypropylene (PP) prices also rose, SCG said.

SCG is Thailand’s biggest conglomerate with manufacturing operations in chemicals, cement, paper and building materials.

Its overall sales for the quarter increased 7% year on year to Bt100.5bn, while earnings before interest, tax, depreciation and amortisation (EBITDA) fell by 14% to Bt12.2bn, the company said.

For the first six months of the year, SCG’s net profit slumped by 39% year on year to Bt10.3bn, weighed by the “negative effects of a global chemicals trough in the first quarter of 2012”, the firm said.

The company’s overall sales rose by 9% year on year to Bt203.4bn, on the back of higher product prices and volume growth in most businesses, it said.

($1 = Bt31.8 / $1 = €0.83)

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By: Nurluqman Suratman

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