Siam City Cement , Thailand’s second biggest cement maker, reported a nine per cent fall in second quarter earnings on Friday, a larger drop than expected, due to weaker sales in a slowing construction sector.
SCCC, 32 percent owned by Holcim , said in a statement it made a net profit of THB944m (US$27m), or THB4.11/share, down from a THB1.04bn a year earlier.
Second quarter sales fell five per cent to THB5.6bn, while sales costs dropped 1.3 per cent to THB3.9bn due to declines in volume, the statement said.
Gross profit margins fell to 29 per cent in the April-June period from 31 per cent a year earlier, due mainly to high costs.
Fuel and electricity account for more than 70 per cent of SCCC’s costs.
The company has said it expects a 10 per cent rise in cement sales this year from THB23bn last year, better than analyst forecasts, due to higher exports.
SCCC expected to produce 14Mt of cement this year, with 8Mt for the domestic market and the rest for exports, an executive has said.
Domestic cement consumption growth would be flat this year at best, or fall 2-5 per cent from 31Mt of last year as political uncertainty after last September’s coup delayed government infrastructure spending plans, analysts said.
Last month, bigger rival Siam Cement reported a 14 per cent decline in quarterly operating profit as a strong baht currency hurt exports and weak demand weighed on its domestic businesses.