Siam City Cement’s 2003 results

Thailand’s second biggest cement maker, Siam City Cement, reported lower fourth-quarter profits on Friday as expected after a stronger baht and higher shipping fees ate into exports. But the company, 32 percent owned by Swiss giant Holcim, still made a record full-year operating profit in 2003 due to higher cement prices during a house construction boom.

This year, an increase in government spending is likely to increase domestic cement demand 10-15 per cent and in 2005, analysts say, fuelling expectations of a similar rise in Siam City’s profits.

Siam City posted a fourth-quarter net profit of 670.6 million baht, down nearly five percent on the previous quarter and 23 percent lower than the same period the previous year, when results were lifted by sales of assets, such as property.  The result took the company’s full-year net profit to 3.288 billion baht  (US$84.4m), the biggest since 1998 when it made huge foreign exchange gains. Its operating profit was 6.47 billion baht, up 24 per cent on 2002.

The company’s stock could rise 20-30 per cent this year, analysts say, especially if market talk of a deal with Holcim to buy a big cement maker in India comes to fruition (possibly Mangalam Cement).  Analysts say Siam Cement is keen to make a foray into India on its own or with Holcim, but it has not given details of its plan.