Siam City Cement (SCCC), Thailand’s second-biggest cement maker, reported a lower-than-expected 2005 net profit on Thursday as margins were hit by rising fuel and electricity prices. SCCC, 32 per cent owned by Holcim, said in a statement, it made a net profit of 4.07 billion baht ($103 million), or 17.15 baht per share, down from a 4.14 billion baht profit in 2004. The 2005 profit was below market expectations with 11 analysts polled by Reuters Estimates forecasting a net profit of 4.4 billion baht in 2005. They expected a net profit of 4.5 billion baht in 2006.
Sales revenues rose 7.7 per cent to 22.4 billion baht in 2005, while sales costs increased 15 per cent to 14.7 billion baht due to higher fuel and electricity costs, the statement said. Analysts said high fuel costs would continue to squeeze profit margins and price competition would be tough this year.
Domestic Thai cement demand is expected to rise eight per cent this year, lower than previous forecast of 12 per cent due mainly to a delay in the government’s plan to spend heavily on infrastructure, SCB Securities said in a note. Last month, bigger rival Siam Cement PCL reported a 12 per cent decline in 2005 net profit as fuel costs rose and it shut plants for extended maintenance.