Siam Cement (SCC) is expected to announce net profit of around Bt8,381mn (EPS of Bt6.98) down 12% qoq and 4% yoy. SCC will announce their 2Q06 earnings results on July 26.
If SCC does report earnings in line with forecast, we would consider it quite positive, even with the decline. Also, lower earnings should be widely anticipated by the market given a number of negative factors, especially higher oil prices, economic slowdown and uncertainty in politics.
Second half earnings should remain positive, with strong petrochemical sector helping to offset the slowdown of SCC’s cement and paper businesses. Petrochemical prices will be supported by continuing strong demand from China and India, while new regional supply will be limited with the delay in the start-up of a new plant in Iran.