Thailand: SCCC reports net profit dip of 8.8% on weak prices

Siam City Cement Plc reported a drop in net profit for the third quarter and the first nine months due to weak prices even though sales have surged. Third-quarter net profit fell 8.8% YoY to THB792m (US$25.7m), while revenue grew 7.7% to THB6.59bn.

For the nine-month period, net profit fell 5.3% from a year earlier to THB2.88bn as revenue increased 10.8% to THB20bn, according to SCCC's filing to the Stock Exchange of Thailand.

''Strong cement consumption driven by infrastructure projects, commercial expansion and the growth of border markets could expand sales by 15%,'' said managing director Philippe Arto.

Sales of ready-mixed concrete volume increased by 9%, mortar 49% and wood-substitute Conwood products by 24%.

''Market prices remain under intense competitive pressure and do not reflect the increase in electricity rates, transport costs and minimum wages impacting third party services,'' said Mr Arto.

Energy-saving initiatives such as waste-heat recovery and the use of alternative fuels generated greater benefits in 2012 than last year, he said.

Earnings per share amounted to BHT3.44 in the third quarter, down from BHT3.77 in the same period of last year, while earnings per share declined to BHT12.52  from BHT13.22  in the first nine months of last year.

Operating profit margin was down to 17.4% for the first nine months, from 21.6% a year earlier. Also, a one-time charge of BHT226m resulting from the liquidation of a dormant subsidiary affected net profit.

''The industry outlook for the remainder of 2012 looks solid with continuing strong demand, whilst the main challenge remains the restoration of operating margins at a level that supports capacity expansion in fast-growing markets,'' noted Mr Arto.