Siam Cement PCL , Thailand’s biggest industrial conglomerate, reported a 33 per cent fall in third-quarter operating profit on Wednesday as higher production costs ate into margins at its petrochemicals business.
Weak economic growth also continued to drag on its cement and building materials business in the quarter and will weigh on the full-year 2007 earnings of Siam Cement.
The firm, which gets almost half its profits from petrochemicals, said its July-September operating profit before non-recurring items fell to 5.63 billion baht ($165 million) from 8.4 billion baht a year earlier.
Net profit fell about one percent to THB7.55bn from THB7.59bn a year earlier, below an average analyst forecast of THB8.18bn.
The figure included a 1.9 billion baht gain from the sale of a stake in petrochemical producer Aromatics , the country’s top maker of aromatic petrochemicals, it said.
Overall sales rose two per cent to THB69.14bn in the third quarter, with cement sales down 0.5 per cent, building materials down 6.3 per cent, paper sales 2.7 per cent higher and petrochemical sales up 4.7 per cent, it said.
Siam Cement, which has been selling non-core assets over the past few years, is expanding its core businesses at home and in Southeast Asia.
It expects big earnings growth again when new petrochemical capacity is completed around 2010.
It has been more conservative on petrochemical expansions over the past two or three than its domestic peers, mostly affiliates of PTT, as Siam Cement wants to control its debt.