Siam Cement Ups 2012 Cement Sales Forecast

24.10.2012 -

Thailand's Siam Cement doubled its forecast for sales growth of the construction material this year, but maintained its forecast for a fall in overall earnings as weak petrochemical prices dragged down third quarter profit.

Petrochemicals, which contribute around half of the profits for Thailand's fifth largest company, have been weighing on earnings in the past four quarters but the company said the business had bottomed out in the latest period.

Thailand's fifth-largest company is expected to benefit government projects and the private property sector, and growth should continue in 2013, Chief Executive Kan Trakulhoon said.

"Cement demand is expected to reach 35 million tons this year, which is the highest since 1996," Kan told reporters, referring to the year before the 1997 Asian financial crisis.

Siam Cement, a barometer of Thailand's corporate health due to the diversity of its businesses from cement to petchems to paper and pulp, posted a July-September net profit of 6.42 billion baht ($209 million).

This was down 13% from 7.38 billion baht a year earlier, but recovered from 4.28 billion in the previous quarter as the company partially reversed a loss it had taken on petrochemical inventories.

Ten analysts polled by Reuters had forecast an average net profit of 6.5 billion baht.

Earnings before interest, tax, depreciation and amortisation (EBITDA) grew 9% from a year earlier, due to growth in the cement business, while sales revenue increased 11% on higher cement and chemical sales volume, it said in a statement.

Siam Cement is Thailand's largest and South East Asia's second largest cement maker with annual capacity of 24.2 million tons.

It has been looking to expand overseas to drive growth, and has earmarked 200 billion baht for investment in the next five years, more than half of it for other Southeast Asian countries.

It aimed to invest 23.2 billion baht ($754 million) in the cement and paper businesses in Indonesia, Cambodia and Thailand, it said on Thursday.