SCCC third-quarter net profit down on weaker demand and pricing

Siam City Cement Co (SCCC) of Thailand posted a 3Q15 net profit of THB823m (US$23.1m), falling 22 per cent YoY. Lower domestic cement demand and selling price led the company's income to fall five per cent YoY to THB7419m.

Although exports to neighbouring countries (eg, Cambodia, Myanmar, and Laos) grew, it was not strong enough to offset declining domestic sales as price competition intensified, thus depressing 3Q15 gross margin to 43.1 per cent.

During the year, cement demand performed below expectations this year due to a number of reasons: the country experienced the worst drought in decades, purchasing power has declined, reduced private sector confidence,  and delays to goverment investment projects. However, an improvement is expected in 2016 on the back of the acceleration of government infrastructure projects.

In terms of expansion, SCCC has entered a joint venture with Chip Mong Cement Corporation in Cambodia, involving construction of a 1.5Mta cement plant in Cambodia. Construction will start in 2016.