Siam City Cement says Q1 revenue hit by political fallout
Siam City Cement Plc, the country’s second largest cement maker, has conceded its revenue in the first quarter of this year has already been hit hard by political turmoil and hopes that the uncertainties will end as soon as possible, the Bangkok Post reports. Chantana Sukumanont, SCCC’s executive vice-president, said the company had begun to worry its sales would miss the five per cent growth target set earlier.
"Actually, I think a target of five per cent for this year is quite conservative. But it seems we can achieve that only under the best-case scenario," she said. Ms Chantana acknowledged that the company experienced lower-than-expected sales - "the worst figure we have ever earned since the [1997-98] crisis" - in the first quarter, particularly in March, when the political tension peaked.
However, modest growth of sales in the first two months could help offset a 10 per cent contraction in March, she said, adding that sales in the first quarter were likely to post zero growth. Ms Chantana said that while sales of luxury housing projects had fallen off, those of low- and middle-income housing and condominiums remained promising because of scarce supply, though some homebuyers might need a longer time to make decisions. She added that cement sales would be driven by a large number of ongoing construction projects.
Ms Chantana said the company’s other strategy was to enhance export sales to compensate for lower domestic revenue. Last year, the company’s export volume totalled 5Mt, higher than 4Mt expected previously. She said 2007 would be a year of more caution for the business sector. Should the political situation improve, the industry would turn around rapidly, as consumers, who had held off buying houses and other big-ticket goods, would begin to spend.
SCCC recently estimated its domestic sales volume this year at 8.3Mt, a six per cent increase year-on-year and slightly higher than the five per cent expected cement-consumption growth. Local cement demand is forecast to rise to 30Mt from 28.1Mt last year. SCCC has been running at its full capacity of 14.5Mt since last year. Last year, SCCC earned revenue of 22.7 billion baht, up 7.1 per cent from 21.2 billion in 2004. Its net profit declined slightly to 4.07 billion baht from 4.14 billion. Published under Cement News
