Siam City Cement 2012 growth forecast

Siam City Cement Co (SCCC), Thailand’s second largest cement producer, posted 4Q11 net profit of THB252m, down 55.3 per cent YoY and 70.9 per cent QoQ. The decline is attributed to lower export sales and higher operating costs due to the Thai flooding, extra expenses from deferred tax adjustments of THB291m and extra expenses from reassessment of employees' pension of Bt150m.

For 2012, analysts at TISCO Securities expect Siam City Cement’s profit to rise 27 per cent thanks to expected five per cent gains in domestic cement consumption for the year and 50 per cent increase in production capacity of wood replacement and cement mortar. In addition, the company will benefit from tax reductions and is expected to achieve a THB150m cost-saving from the full year operations of waste heat generator that should partly cover a 20 per cent rise in coal costs.

TISCO believe that SCCC’s investment in new cement plants in Cambodia (with a capacity of 1.15Mta set for completion in 2015) and Myanmar (under study) and a wood replacement plant in Indonesia (to start in 2014) should add marginal profit.

Source: Thai News Service