Flood factor hits Siam Cement 4Q11, Thailand

Siam Cement is expected to report weak 4Q11 net profit of THB3.3bn across all units, a fall 80 per cent YoY and 55 per cent QoQ, due to major floods which hit Thailand in the second half of last year.

SCB Securities expect that, excluding extra items, 4Q11 normalised profit is estimated at THB4.8bn, down 28 per cent YoY and 23 per cent QoQ, dragged down by flood-damaged earnings across all business units which also include petrochemical and paper. However, the core cement unit is expected to perform the best, underpinned by relatively stable cement prices at a high level and an increase in local cement sales volumes of 2-3 per cent despite more than a 30 per cent drop in exports sales as floods created logistical  issues to facilitate deliveries.

Now that the floods have been drained, earnings are expected to regain their strength and 1Q12 earnings are expected to bounce back from pent up demand in all units together with the need for reconstruction and renovation work on flood damaged areas.