SCCC’s profit decline slows as demand revives

SCCC’s profit decline slows as demand revives
Published: 21 August 2009

In 2Q09, Siam City Cement Plc (SCCC) posted a fall of 9.5% in net profit on a YoY basis to THB695m. In the wake of falling demand, sales were down at THB4.92m (-5.7% over THB5.21m in 2Q08).

As projected earlier, in 1H09, a fall in both domestic and export markets of cement was observed. The operating margin during 1H09 was 215 (22% in 1H08). Depending upon a stable political and economic environment, SCCC anticipates that in 2H09, demand for cement will remain at about the same level as in 2H 2008.

Further, with the increase in energy prices, the company intends to raise the price of cement in all its markets. Analysts are of the view that SCCC’s earnings would be about THB679m in the 2Q.

The Bank of Thailand also said earlier that local cement consumption returned to 5.5% YoY growth in June and its outlook was brighter for the 2H09. KGI Securities projected that the consumption of cement will decline by 10% and not 15% in 2009.