Siam City Cement 2Q net profit falls, Thailand

Siam City Cement Plc (SCCC), Thailand's second-largest cement producer, reported a 30.5 per cent drop in 2Q net profit  although sales increased by more than 12 per cent as operating margins were hurt by lower cement prices and higher energy costs.

In a filing to the Stock Exchange of Thailand on 2 August, SCCC said its net profit totalled THB809m in the quarter to June compared to THB1.056bn a year before. Net sales, meanwhile, rose 12.2 per cent to THB6.49bn as domestic cement consumption recovered.

Earnings per share were THB3.52  for the period compared to THB4.59 for the same period in 2011, it added.

Cement consumption increased in the second quarter on the back of infrastructure activity, such as the foundation phase of the Blue and Green mass transit rail lines along with a rebound of demand in the private real estate sector, SCCC said in the statement.

However, the operating margin of the cement business was affected by lower bag cement prices and higher cement operating expenses influenced by energy costs such as fuel and electricity, it added.
For the six-month period, net profit shrunk 3.9 per cent YoY to THB2.09bn from THB2.17bn, though sales increased 12.3 per cent to THB13.48bn from THB12bn for the same period of 2011. Half-year earnings per share amounted to THB9.08 as compared to THB9.45 the year before.

Cement consumption rose by about six per cent YoY in the first half of 2012. For the full-year forecast, SCCC expects domestic cement consumption to grow over five per cent or beyond 29Mt. The construction industry, in particular, should see a solid growth driven by the government's infrastructure plan.