SCC’s Weak Chemical Business and Lower Product Margin Plunge 3Q Profit by 35%!

The Siam Cement Public Company Limited (SCC) has reported its 3Q19 consolidated financial statement through the Stock Exchange of Thailand as follows:

SCG reported Q3/19 Profit for the period of 6,204 million baht, a drop of -12% QoQ. This is mainly attributed to lower performance in the Chemicals Business, arising from the Deferred Tax Assets Reversal of 1,063 million baht, decreased equity income 983 million baht, and the ongoing trade war which continued to soften demand of HDPE products.

Moreover, there was an asset impairment of 762 million baht, of which 640 million baht impairment in Cement-Building Materials Business was mainly from the regional non-Thai Ceramics Business. Similarly, EBITDA registered 14,842 million baht, representing a drop of -25% QoQ. Revenue from sales increased slightly by +1% QoQ to 110,330 million baht.

On a YoY basis, Q3/19 Profit for the Period -35% YoY, mainly on the decreased contribution from the Chemicals Business, arising from the 2,022 million baht drop in equity income, and lower product margins. Similarly, EBITDA dropped -17% YoY, while Revenue from Sales decreased -10% YoY, mainly from lower chemical product prices.

For the period of 9M/19, Profit for the Period registered 24,910 million baht, a drop of -27% YoY or 9,371 million baht, The key items that had affected to dropped profit were Q2/19 Severance Pay Adjustment (Labour Law) of 2,035 million baht, the Q3/19 Deferred Tax Assets Reversal of 1,063 million baht, Q3/19 assets impairment of 762 million baht mainly from the regional non-Thai ceramics business and the global trade war concerns which continues to affect the chemicals margins of both subsidiaries and associated companies. Likewise, EBITDA decreased -19% YoY to 54,202 million baht, while Revenue from Sales also dropped -8% YoY to 331,803 million baht, following lower chemical prices.