Cement earnings fell 13 per cent YoY. Domestic cement demand declined by 6 per cent YoY, but increased 7 per cent QoQ. SCC’s cement sales were down 2 per cent YoY due to a 6 per cent drop in domestic volume but a marginal (3 per cent) price increase year on year.
However, export volume still rose slightly to 2Mt although the margin is narrower versus domestic sales. The FOB price averaged at US$33.4/t. Management has lowered its target from flat growth to a 5 per cent drop for this year in domestic demand, which we are already anticipating.
Paper profit down 3% YoY. The paper division posted a 3% YoY contraction in operating profit for 1Q07 on: a) 1 per cent surge in sales (packaging paper sales volume up 7% but printing & writing paper sales flat), and b) a 4 per cent decline in EBITDA on rising raw material costs.