SIAM CITY Cement (SCCC) estimates that Thai demand for cement is continuing to deteriorate and will at best be flat this year, with lack of demand and an oversupply situation having led to lower prices in the domestic market.
However, the listed company’s new cement subsidiaries, particularly those established in Bangladesh and Sri Lanka, have helped to alleviate surplus supply and generate considerable earnings, chief executive officer Siva Mahasandana said in a press release issued yesterday.
SCCC’s revenue in the first nine months of the year came in at Bt24.79 billion, up 5 per cent from the same period last year, while net profit was Bt3.03 billion – down 16 per cent year on year.
“Our net profit for the first nine months of this year was affected by the costs related to the acquisition activities, our annual shutdown costs and a higher financing cost,” he said.
The acquisition of a cement manufacturer in Sri Lanka was completed on August 10 and the company – renamed as Siam City Cement (Lanka) Ltd – immediately contributed about 5 per cent year-on-year revenue growth, the CEO added.
Meanwhile, domestic cement-sales volume for the first nine months declined by 2 per cent from the same period last year.
According to data from the Office of Industrial Economics, domestic cement consumption recorded a year-on-year drop of 1 per cent to 25.8 million tonnes up to the third quarter.
Slow demand is attributed to a weaker economy, leading to reduced private consumption and investment, while construction activity on infrastructure mega-projects has not made meaningful progress as yet.
SCCC reported that its INSEE concrete sales had grown 6 per cent in volume during the first nine months of the year, while facing a continuous drop in selling prices.
The company’s Conwood products generated net sales of Bt347 million during the nine months, some 8 per cent higher than in the same period last year.
“Our product highlights in the third quarter were Conwood Deck and Conwood Decorative Panel, for the domestic and export markets,” Siva said.