Thailand’s Siam Cement is likely to report an on-year drop in its first-quarter earnings as high energy prices cut into profit, analysts said. However, the industrial conglomerate is expected to record on-quarter earnings growth in the January-March period due to strong contribution from its petrochemical business, they said. However, the company’s cement sales likely dropped four per cent on quarter and five per cent on year to THB10.02 billion in the first quarter, according to Siam City Securities. 

Analysts said soaring oil prices in the first quarter significantly raised energy costs for Siam Cement’s cement and paper divisions. While the petrochemical business remained fairly strong in the first quarter, supported by healthy spreads between raw material costs and olefin prices, cement entered a soft patch. 
 
 "Despite improvement in cement demand for the residential market, including the provinces, slow demand from government projects should lead to a slight decrease in overall domestic cement sales volume in the first quarter this year," analyst Anongnuch Cheewaratanaphan of KGI securities said in a research note.