Siam Cement Plc, the country’s largest industrial conglomerate is expected to report full year earnings that will show an increase of at least 50 per cent, with the company indicating that it may surprise investors with heavy dividend payout. Siam Cement, which has nearly 100 companies under its umbrella, is expected to report net profits of between 4.3 to 4.9 billion baht for its fourth quarter, thus bringing its full year net profits to between 17.2 to 18.5 billion baht.
"We estimate 2003’s fourth quarter net profit at 4.3 billion baht, up 75 percent year-on-year and 4 percent quarter on quarter," Andy Jenwipakul, an analyst at CLSA Securities (Thailand) said in a recent report. His estimates were in line with market expectations adding that he’s revised up forecast to reflect for stronger than expected petroche margins in the fourth quarter of last year.
"Our full-year earnings forecast is 17.2 billion baht, up 53 percent year-on-year." Rising cement prices, improving petrochemical margins and contributions from the building products sector leveraged to Thailand’s booming property market have been the main factors behind SCC’s impressive performance this year. The outlook for 2004 looks good, but perhaps not as bright as 2003.
"We are less bullish on cement operations, but that partly depends on the government’s plan for infrastructure spending," says one analyst, who is expecting single-digit growth from the cement operation in 2004 compared to 40 percent in 2003. There is little demand growth for cement say analysts, but that could change in the second half of the year if the government is successful in accelerating some of its planned 1.5 trillion baht infrastructure spending plan. After good hikes in 2003, cement prices are also expected to remain flat next year according to analysts. Putting up prices in an election year could be difficult they say.