Thai SCG Packaging Q1 profit falls 22% on high raw material, energy costs

Pearl Bantillo


SINGAPORE (ICIS)–SCG Packaging Public Co’s (SCGP) first-quarter net profit declined by 22% year on year, weighed down by high raw materials and energy costs, the packaging arm of Thai conglomerate Siam Cement Group said on Tuesday.

in million Thai baht (Bt) Q1 2022 Q1 2021 % change
Sales  36,634  27,253 34
Integrated packaging chain sales  30,955  22,967 35
Fibrous business sales    5,679    4,286 33
EBITDA 4,887 5,267 -7
Net income 1,658 2,135 -22

March-quarter revenues grew 34%, partly on strong performance from the integrated packaging segment and higher demand, as well as a “surge of demand and pulp price amid concern on global supply chain disruption”, the company said.

The consolidation of Intan Group in Indonesia and DeltaLab also boosted revenues during the period.

The company’s efforts to manage costs include an “increase in proportion of local recycled paper as raw materials, expansion of own recycling centers with current total of 73 centers across Thailand, Vietnam and the Philippines, [and] the adjustment of import and export transactions to be more toward FOB (free on board) format”.

“Moreover, cross borders logistics through truck delivery was being used to replace some sea transportation routes to avoid high freight rate,” it said.

In the second quarter, the company expects some improvement in business conditions as more countries lift COVID-19 restrictions.

It, however, said that risks remain on the demand side amid China’s strict pandemic-related lockdowns, with energy and commodities staying elevated due to the Russia-Ukraine war.

($1 = Bt34.54)

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