SCC: Signs of Recovery

The consolidated financial performance of the Siam Cement Public Company Limited (SCC) over the last 2 years has been experiencing a large contraction in profit…in 2017, profit was as high as 55,041 million baht, later in 2018, profit dropped to 44,748 million baht and shrank to 32,014 million baht in 2019…it’s quite disappointed.

 

The decline in revenue was mainly dragged by decreased chemical business performance…,which is the most important contributor to SCC’s income, resulted in a lower profit.      

 

Moreover, SCC 1Q20 core profit has plunged to 6,971 million baht, a 40% fall when compared to a year earlier.

 

However, the overall performance started showing an improvement as in 2Q, SCC’s net profit surged 33% year-on-year to 7,043 million baht, which beat expectation…and the 3 key business units are signaling a recovery as well. 

 

Even thought, revenue from sales of chemicals business segment was dropped by 24% YoY to 34,758 million baht, but EBITDA increased to 9,820 million baht or 24% YoY, while EBITDA margin increased from 9% in 2Q19 to 20%, leading a profit for the period was 4,564 million baht or +23%.

 

Revenue from sales in other core business such as the cement–building materials business also posted a decrease by 7% to 42,506 million baht but signaled a positivity. EBITDA registered 6,001 million, increased 13% YoY and EBITDA margins rose to 13% from 11% in 2Q19. Profit for the period was at 1,944 million, increased 211% YoY.

 

Meanwhile, packaging business sector remains stable,…revenue was at 21,636 million baht or increased by 6% compared to a year ago. EBITDA increased 19% YoY to 3,963 million baht and EBITDA margin rose to 20% from 16% in 2Q19, improving a profit for the period to increase 94% YoY to 1,904 million baht.

 

SCC also has a support from SCG Packaging Public Company Limited (SCGP) as it already obtained SEC’s approval of its IPO application and preparing to be listed on SET. 

 

SCC paid interim dividend payment at ฿5.50/share, despite drop in profit. At least, we all could see a recovered sign from SCC…let’s anticipate how far will SCC go…