Siam Cement PCL, Thailand’s biggest industrial conglomerate, is expected to post a 21 per cent drop in first-quarter earnings this week as prices of oil and other raw materials soared.

Its key petrochemical business, which accounts for about half of total profits, was weighed down by weaker margins, which are likely to remain under pressure as new supplies from the Middle East come on stream from late 2008.

"The year on year fall is mainly because of falls in profit from all businesses owing to lower product spreads, higher costs and the baht’s steep appreciation," Tisco Securities analyst Sansanee Srijamjuree said.

Siam Cement has stakes in more than 100 petrochemical, cement, paper and related businesses and is often billed as a bellwether stock for Thailand’s economy. It is set to announce its quarterly results on Wednesday.

Net profit in the January-March quarter was seen at 6.5 billion baht ($205 million), down 21 percent on last year’s 8.2 billion baht, but up 12.6 percent on fourth-quarter earnings, according to nine analysts surveyed by Reuters.

Published under Cement News