Despite enjoying growing sales in the first nine months of the year, the Siam Cement Group (SCG) saw its net profits shrink largely due to higher fuel expenses.
Kan Trakulhoon, the group president, said the country’s largest industrial conglomerate posted consolidated revenue of THB195.58bn for the nine months to September, a 16% year-on-year increase. However, the group posted a net profit of THB24.77bn for the period, a nine per cent YoY decrease.
In addition to the higher energy costs that brought down its net profit, the asset impairment charge incurred by the shutdown of a subsidiary, the television tube manufacturer Thai CRT, amounted to THB798m in the third quarter.
In the third quarter, the group’s sales were 67.69 billion baht, up 20% from the same period last year, while operating profit rose just 5% to 8.39 billion baht even though the petrochemical business posted better-than-expected margins. Net profit was off 9.7% year-on-year at THB7.59bn.
Despite the fact that it is expected to take an impairment charge of THB2.7bn for Thai CRT’s after-tax remaining assets in the fourth quarter, its profit in the fourth quarter is expected to be about THB5.1bn more than it reported in the same period last year.
Although the prospects for petrochemicals look bright, SCG’s other core business, cement, continued to struggle. Domestic demand has dropped gradually as energy costs have spiked.
The cement business reported sales of THB11.2bn, an increase of 5% from last year, boosted by strong export growth, while the operating profit declined 19% from last year.
Mr Kan predicted the industry would be stagnant throughout this year due to the recent heavy flooding.