Siam City Cement (SCCC) is expected to announce 4Q06 profit of Bt778m, down 21% QoQ, but up 18% YoY. Sales are forecast to fall 9% QoQ due to flooding in many rural areas of Thailand in 4Q06. However, they are expected to edge up 2% YoY due to increases in sales prices to Bt1,775-1,800/t from Bt1,600-1,650/t in 4Q05.
SCCC management expects domestic cement demand this year to be flat. However, the company is over-cautious and expect domestic cement demand to rise by 3-5%. Sales prices are expected to increase 3% to Bt1,800/t, with earnings supported by lower energy costs. This year SCCC sales are expected to grow 6.6% to Bt25,179mn, with net profit rising 8% to Bt4,234m.
SCCC is unlikely to be affected by the Cabinet decision yesterday to amend the Foreign Business Act, which will force foreign companies with controlling voting rights in Thai-registered firms to cut their voting rights to less than 50%. SCCC’s major shareholder, Holcim, does not fall foul of the new law as its indirect and direct holdings amount to about 46%.