Thailand: SCG sees cement revenues fall 19% in 3Q2016

Siam Cement Group (SCG) has announced that in the third quarter of 2016 profits rose by 57 per cent YoY, but at the company's cement and building materials division they saw a decline of 19 per cent.

For the nine months to the end of September 2016, SCG’s profits are up 28 per cent on the same period last year, but cement division profits are down 13 per cent. Siam Cement Group has seen revenues decline across the board, but its chemical division has been helped by the fall in oil prices that has reduced the cost of its inputs.

Revenues in the cement division were down six per cent YoY in Q3 at THB41bn (US$1.17bn), and down five per cent for 9M2016 at THB130bn.

In a statement accompanying the release of its trading figures, SCG said that cement demand in Thailand had fallen by five per cent YoY in Q3 due to lack of private sector demand. For 9M16, demand was down by one per cent on the same period last year.

Siam Cement Group exported 0.8Mt of cement and clinker in Q3, comparable to the amount it had a year previously.

Domestic cement prices fell to around THB1700-1750/t in Q3, down from THB1850-1900 in 3Q15. The average FOB export price was also down US$12 to US$53/t, although here the change reflects the higher proportion of clinker sold compared to 3Q15.

"We need to admit that the country's economic outlook this year is not as good as we expected earlier and that might make our revenue forecast miss the target. But we will do our best to make it better," said Roongrote Rangsiyopash in a quote carried by the Bangkok Post.

The newspaper also reports that SCG is carrying over THB25bn from its current investment budget into the next financial year to allow the firm more funds for mergers and acquisition activity in FY2017.