In the second quarter it reported sales of Bt63.75 billion while its unaudited consolidated net profit fell to Bt7.63 billion despite an extraordinary gain of Bt580 million from selling its stake in Millennium Steel Plc. While the company's paper business showed an increase in earnings, lower earnings plagued its petrochemical and cement units.

Kan Trakulhoon, president of Siam Cement Plc, predicted the tide would turn in the second half of this year following the setting of the October 15 election. "If the political turmoil ends, investor and consumer confidence will be restored," he said.

Kan said that if the election took place, SCG would carry out its investment plans but if the election was delayed, the company's cement and building-product sales would further suffer. That's because there would likely be additional delays in large government construction projects.

"As of now, Thailand is relying mainly on its exports, because the domestic market has contracted due to higher interest rates and energy costs. However, investment should keep growing at 4 to 5 per cent per annum, while the gross domestic product growth in the latter half should be around 3.5 to 4 per cent. It's not quite worrisome," he said.

Despite the UN's stand-off with Iran over its nuclear programme, Kan said SCG is committed to its petrochemical investment in the country. "Risks are present, but the investment project is 96-per-cent insured and there are abundant resources there," he said.

In the second quarter, the chemical business recorded sales of Bt30.45 billion, an increase of 50 per cent year-on-year, due to higher pricing and account consolidation of Thai Plastic and Chemicals Plc. Though, the company's earnings before interest and taxes decreased 8 per cent year on year due to lower margins on lower by-product credits from its naphtha cracker facility.

The paper business recorded sales of Bt10.55 billion, growth of 5 per cent on a year-on-year basis, attributable to strong domestic demand in printing and packaging industry as well as the consolidation of British Security Printing Plc's account. Its operating profit increased 3 per cent year on year.

The cement business recorded sales of Bt10.82 billion, an increase of 9 per cent year on year due to a higher export pricing. But, its operating profit decreased 24 per cent due to the increased cost of fuel and electricity and a decrease in domestic demand.

In the first half of this year, SCG's revenue amounted to Bt127.89 billion, growth of 15 per cent from the same period last year, while net profit dropped 8 per cent to Bt17.18 billion. Despite its lagging profits, the company has proposed an interim dividend payment of Bt7.50 per share its the first half operations.

Watcharapong Thongrung

The Nation