A Plummet in Chemical Sales Causes SCC to Book Lower Profit in 1Q20 by 40%

The Siam Cement Public Company Limited (SCC) has reported its 1Q20 consolidated financial statement through the Stock Exchange of Thailand as follows;

SCC reported a net profit of 6,971 million baht in 1Q20, decreased 40.22% when compared to a net profit of 11,662 million in 1Q19 mainly due to the decline in performance of the chemicals business in light of decreased product margins. Moreover, revenue from sales decreased 6% YoY, mainly from lower chemicals prices due to weak global demand.

Equity Income in 1Q20 registered 1,245 million baht, representing a drop of 2,359 million baht YoY or 65%. The chemicals portion accounted for 20% of the total equity income, or 248 million baht, which declined 89% YoY, while the non-chemicals portion was the remaining 80% or 997 million baht, dropped-29% YoY.

Total dividends received in 1Q20 amounted to 284 million baht, a decrease of 80% YoY or 1,153 million baht, with details as follows: a) 173 million baht from “Associated” companies (20%-50% stake), and b) 111 million baht from “Other” companies (less than 20% stake).

 

In 1Q20, revenue from the chemical sales was 38,329 million baht, decreased 17% YoY, from lower product prices and sales volume. EBITDA dropped 64% YoY to 2,913 million baht due to lower dividend from associates, while EBITDA from operations declined to 2,822 million baht or 60% YoY as a result of lower product margins.

Profit for the period was 1,778 million baht, decreased 70% YoY from lower equity income from associates and lower product margins. Chemicals Business realized inventory loss of 1,100 million baht in 1Q20, an increase of 1,530 million baht YoY.

Revenue from sales in the cement–building materials business in 1Q20 registered 46,245 million baht, decreased 4% YoY due to lower sales in the domestic market. EBITDA decreased 2% YoY to 6,736 million baht. Profit for the period registered 2,778 million baht, decreasing 2% YoY.

Lastly, total consolidated revenue from sales of packaging business registered 24,267 million baht, an increase of 15% YoY, attributable to the consolidation of Fajar and Visy Thailand, and the internal efforts to proactively engage and serve customers to meet market challenges brought about by the Covid-19 pandemic. Consolidated EBITDA increased 33% YoY to 5,031 million baht, achieving EBITDA margin of 21%, while consolidated profit for the period increased 7% YoY to 1,732 million baht.