"If SCC does report earnings in line with our forecast, we would consider it quite positive, even with the decline," a report from Kim Eng Securities said.

"Also, lower earnings should be widely anticipated by the market given a number of negative factors, especially higher oil prices, the economic slowdown and political uncertainty," the brokerage said.

In the second quarter, SCC will also book a gain from a divestment in Millennium Steel of about Bt580 million.

The strong petrochemical sector is helping offset the slowdown of SCC's cement business, the brokerage said.

Petrochemical prices during the April-June period remained strong. Polyethylene prices averaged US$1,205 (Bt45,529) per tonne, up 8 per cent quarter on quarter and 22 per cent year on year, and polypropylene prices were $1,200 per tonne, up 8 per cent on quarter and 16 per cent on year.

Sales volume, however, should be down slightly quarter on quarter to 275,000 tonnes, the brokerage forecast.

The earnings outlook for SCC's petrochemical business in the second half looks good, particularly with limited new supplies coming online from the Middle East with a possible delay in the start-up of an Iranian petrochemical plant due to the international controversy over its nuclear programme.

Meanwhile, rising demand from China and India are driving up petrochemical prices as well as spreads between polyethylene and naphtha, and polypropylene and naphtha. The current spread between polyethylene and naphtha is at $600-650 per tonne compared with the previous average of $585 per tonne. SCC had estimated a spread of $500 to $550 per tonne.

The overall value of SCC's second-quarter cement sales is projected at Bt10.82 billion, down 7.8 per cent quarter on quarter but up 8.5 per cent year on year due to higher prices in both the domestic and export markets.

The industrial and packaging-paper businesses are expected to be affected by the economic slowdown, but the writing-paper business should find support from school textbooks, elections the World Cup and the celebration of the 60th anniversary of His Majesty the King's accession to the throne.

As a result, contributions from SCC's paper businesses are expected to be stable.

Based on the broker's first-half earnings per share forecast of Bt14.94, SCC is expected to pay an interim dividend of Bt7 to Bt8 per share and a dividend of about Bt15 per share for the full year.

Kim Eng is maintaining its long-term "Buy" on the stock with a fair value price of Bt270 apiece.