Thai conglomerate, Siam Cement (SCC) is expected to post weak QoQ earnings for 2Q11 due mainly to seasonal factors, lower petrochem spread and inventory loss. However, earnings will improve in 2H11 while growth momentum should gain pace in 2012 from better petrochem spread, higher utilisation at its second cracker and increasing contribution from HVA products.
A 2Q11 net profit of Bt7.35bn is forecasted which represents a fall of 20.2% QoQ but flat YoY (+0.8%). The decline QoQ is due to lower petrochem spread and inventory loss compared with a Bt1bn gain in 1Q11. Besides, equity income is expected to fall 29.6% QoQ to Bt2.14bn due mainly to lower profit sharing from its petrochem associates from softening product spread. However, this should be partially offset by dividend income from investments.