Siam City Cement (SCCC) reported strong 3Q04 earnings with a net profit of Bt1,112mn (EPS Bt4.62), up 17 per cent qoq and 58 per cent yoy. The strong rise qoq was the result of an upturn in sales and gross margins, while selling and administrative expenses to sales fell.
SCCC sales were very strong at Bt5,284mn, up 10 qoq and 26 per cent yoy, surprising in that domestic cement demand was up only 2% qoq and 12 per cent yoy. The strong increase in SCCC sales, when compared with the total market was due to the shut down of three production lines at TPIPL in Sep 2004. Total domestic cement sales were good, even though it was the rainy season. This was driven by government spending on infrastructure projects, especially the new airport project, as well as continued robust residential construction.
SCCC management expects domestic cement demand to grow by 8 per cent this year to 25.4Mt and another 8 per cent in 2005 to 27.4Mt. Industry drivers are Thailand’s economic growth (projected at 6-6.5 per cent this year), government spending on infrastructure projects and private investment. The company aims to meet stronger demand by reopening two kilns in 4Q05, in order to maintain its market share of 28 per cent.