SCC’s Earnings Drop 30% in 3Q after Recognizing Asset Impairment at Myanmar Cement Plant

The Siam Cement Public Company Limited (SCC) has announced its 3Q21 consolidated financial statement through the Stock Exchange of Thailand as follows;

SCC reported Q3/21 Revenue from Sales of 131,825 million baht, stable at-1% q-o-q despite the weak demand caused by COVID-19 resurgence and lockdown in both domestic and regional markets. EBITDA dropped -54% to 14,741 million baht and Profit for the Period dropped -60% q-o-q to 6,817 million baht, due to key items in Q3/21 including the recognition of asset impairment at the cement plant in Myanmar and the gain from fair value adjustment of investment. Normalized EBITDA adjusted for the aforementioned key items would have been 16,806 million baht or -48% q-o-q due partly to the seasonal absence of dividend income. Normalized Profit would have been 9,066 million baht or -47% q-o-q from lower chemical product spreads and equity income.

On a y-o-y basis, Revenue from Sales increased +31% y-o-y largely attributable to higher chemicals product prices. However, EBITDA decreased -23% and Profit for the Period decreased -30%. Excluding key items, Q3/21 normalized EBITDA would have dropped -15%  from rising Naphtha price and Normalized Profit would have dropped -11% y-o-y mainly due to Cement-Building Materials (CBM) performance affected by COVID-19 resurgence. While still registering q-o-q and y-o-y deterioration, the results were aided by efforts from CBM business’ sales diversification amid government-ordered closure of construction sites during  July-August and Chemicals business’ sales channeling effort which  allowed record-high polyolefin sales volume to be achieved amid COVID-19 resurgence and freight tightness. Normalized EBITDA margin would have been13% instead of 11%.

For the period of 9M/21, Revenue from Sales registered 387,446 million baht, an increase of +28% y-o-y. EBITDA increased +25% y-o-y to 70,457 million baht, thanks to the healthy Chemicals business’ performance. Correspondingly, Profit for the period registered 38,867 million baht, an increase of +49% y-o-y aided also by the significant Chemical product spreads as well as the equity income.

For the period of 9M/21, Packaging business reported Revenue from Sales of 89,078 million baht, an increase of +29% y-o-y. EBITDA registered at 15,755 million baht, an increase of +24% y-o-y and Profit for the Period registered at 6,179 million baht, an increase of +24% y-o-y. EBITDA margin was 18%, maintained to the same period of last year.