Thailand’s Siam Cement’s 3Q08 net profit is expected to fall 19% YoY and 15% QoQ to Bt6.09bn. Excluding the divestment gain booked in 3Q07, core profit should grow 8% YoY due to better margins at most business units. Meanwhile, lower QoQ profit would be attributable to weak cement demand and the absence of dividend income, while HDPE and PP spreads remained strong and its paper business margin has improved.
3Q08 net profit is expected to be better than our earlier expectation due to strong petrochemical margins. But FY08F net profit premised is retained on looming risks arising from the global financial crisis. Net profit is expected to fall 9% and 21% in FY08F and FY09F, respectively, dragged by the petrochemical downcycle. But net profit should stabilise in 2010, as new petro-chemical capacity should offset weaker spreads.