Thailand: Siam City Cement anticipates flat domestic demand in 2014

Siam City Cement Co (SCCC) posted flat volumes in the fourth quarter of last year and expects demand to remain subdued during 2014 due to the postponement of infrastructure and private sector projects.

 "In the fourth quarter of last year, the company saw flat volume, both QoQ and YoY. This year, the construction industry may not grow because of delays in large-scale infrastructure projects and private investments," the listed company said in a press release yesterday.

However, the company reported higher revenue and net profit for 2013. Revenue came in at THB29.95bn (US$918.9m), up 13.3 per cent YoY, while net profit rose 31.9 per cent to THB4.79bn.

SCCC said in its press release that last year's earnings were underpinned by solid demand experienced by cement and other construction-material businesses, due to infrastructure projects, commercial construction and real-estate development. An increase in electricity tariffs, maintenance costs and wage-driven cost escalation were abated by improved cement prices and favourable coal prices throughout last year. As a result, the operating profit margin improved to 20 per cent, from the prior year's 16.7 per cent.

Earlier, domestic peer Siam Cement Group also said it expects cement demand growth in Thailand to decelerate this year on the back of a slowdown in government infrastructure spending due to political unrest.