Siam Cement PCL , Thailand’s top industrial conglomerate, posted a 30 per cent fall in third-quarter profit as high oil prices squeezed petrochemical spreads and cement margins, but the result beat expectations.
Risks of strong oil prices continue to weigh on the company’s outlook, although analysts expect prices of its petrochemical products to remain firm over the next two years due to limited new supply from the Middle East and China. The company also plans to hike cement prices next year.
Petrochemical earnings will continue to drop in the fourth quarter due to a planned 35-day shutdown for Siam Cement’s petrochemical plant in November, and analysts said. But earnings for cement and building products should rise, given the normal pick-up in construction activity at the end of the rainy season, they said.