Siam City Cement (SCCC) posted a 2Q10 net profit of Bt731mn that marks a rise of nine per cent YoY and a decline of 11 per cent QoQ. The QoQ decline was due to a seasonal effect, while the YoY growth was due to stronger domestic demand for cement since the beginning of the year.
Domestic demand for grey cement in 1H10 of 13.6Mt was an increase of 12 per cent YoY, with demand in 2Q10 of 6.8Mt representing an 18% increase YoY. As all manufacturers focused on maintaining market share rather than on expanding sales, SCCC’s sales volume in 2Q10 increased by 18 per cent YoY, the same rate as domestic demand.
This should be the first year since 2007 that the company will show positive revenue growth, as judged by actual sales revenue in 1H10 that already grew by 5.7 per cent YoY, while domestic demand growth looks set to continue in 2H10 driven by construction of some mega projects, such as the purple mass transit line, extension of the MRT subway line, and construction of residential and commercial projects along these two routes will begin in 2H10. As a result, 2010 net profit should be around THB3.32bn, or growth 16.1 per cent .