Jan. 28 (Bloomberg) -- Siam Cement Pcl, Thailand’s fourth- largest publicly traded company, posted its first quarterly loss in eight years after sales collapsed and tumbling commodity prices forced it book a record inventory writedown.
The loss was 3.48 billion baht ($99.7 million) in the three months to Dec. 31 compared with profit of 5.77 billion baht a year earlier, the company said today. The loss was higher than the 2.71 billion baht median estimate of six analysts in a Bloomberg survey. Sales tumbled 21 percent in the quarter.
The Thai economy may enter its first recession in a decade this quarter after anti-government protests and the global slowdown curbed demand, according to Jan. 23 comments from the central bank. Prices of ethylene and propylene, used to make plastics, tumbled more than half in the three months to Dec. 31 from the previous quarter, according to Bloomberg data.
There was an “unprecedented stock loss, which was the result of a drastic plunge in global commodity prices,” Chief Financial Officer Roongrote Rangsiyopash said today at a media briefing. There were “steep price drops” for naphtha, ethylene, propylene, wastepaper and pulp, Roongrote said.
Sales in the fourth quarter dropped to 55.1 billion baht, while the company wrote down the value of its inventory by about 5 billion baht in the three-month period. Full-year profit fell 45 percent to 16.8 billion baht, Siam Cement said in a separate stock exchange filing.
Poor Outlook
Siam Cement’s “business outlook is poor especially for petrochemicals,” said Avin Sony, an analyst at ABN Amro Securities Co. in Bangkok who has a “sell” rating on the stock. “We remain skeptical about any increase in cement demand in the short term.”
SCG Petrochemicals Co. Ltd., the company’s petrochemical unit and its biggest business, had a net loss of 4.36 billion baht in the quarter compared with net income of 7.8 billion baht a year earlier. Profit at SCG Cement, its cement division, rose 10 percent to 1.15 billion baht, according to the company’s statements.
“Writedown of inventory value won’t repeat this year as the prices of petrochemical prices have stabilized,” President Kan Trakulhoon told reporters. “Cement demand in Thailand and the region will continue to drop in the first half of this year because of the economic slowdown.”
Delayed New Plants
The company has delayed construction of new cement plants in Indonesia and Cambodia because of slowing demand for the materials in those countries, said Kan. Its new cement plant in Indonesia would cost about 8 billion baht to build, said he said.
It may cost as much as 6 billion baht to construct a factory in Cambodia, Kan said in May.
Siam Cement closed unchanged at 105 baht in Bangkok trading. The stock has gained 1.9 percent this year compared with a 0.4 percent decline by the benchmark SET Index.
The company, founded by Thai King Vajiravudh in 1913 and controlled by the Crown Property Bureau, the King’s asset-management arm, has businesses ranging from cement and petrochemicals to paper and building materials. Today’s quarterly loss was the first since the three months to Dec. 31, 2000.
To contact the reporter on this story: Anuchit Nguyen in Bangkok at anguyen@bloomberg.net
The loss was 3.48 billion baht ($99.7 million) in the three months to Dec. 31 compared with profit of 5.77 billion baht a year earlier, the company said today. The loss was higher than the 2.71 billion baht median estimate of six analysts in a Bloomberg survey. Sales tumbled 21 percent in the quarter.
The Thai economy may enter its first recession in a decade this quarter after anti-government protests and the global slowdown curbed demand, according to Jan. 23 comments from the central bank. Prices of ethylene and propylene, used to make plastics, tumbled more than half in the three months to Dec. 31 from the previous quarter, according to Bloomberg data.
There was an “unprecedented stock loss, which was the result of a drastic plunge in global commodity prices,” Chief Financial Officer Roongrote Rangsiyopash said today at a media briefing. There were “steep price drops” for naphtha, ethylene, propylene, wastepaper and pulp, Roongrote said.
Sales in the fourth quarter dropped to 55.1 billion baht, while the company wrote down the value of its inventory by about 5 billion baht in the three-month period. Full-year profit fell 45 percent to 16.8 billion baht, Siam Cement said in a separate stock exchange filing.
Poor Outlook
Siam Cement’s “business outlook is poor especially for petrochemicals,” said Avin Sony, an analyst at ABN Amro Securities Co. in Bangkok who has a “sell” rating on the stock. “We remain skeptical about any increase in cement demand in the short term.”
SCG Petrochemicals Co. Ltd., the company’s petrochemical unit and its biggest business, had a net loss of 4.36 billion baht in the quarter compared with net income of 7.8 billion baht a year earlier. Profit at SCG Cement, its cement division, rose 10 percent to 1.15 billion baht, according to the company’s statements.
“Writedown of inventory value won’t repeat this year as the prices of petrochemical prices have stabilized,” President Kan Trakulhoon told reporters. “Cement demand in Thailand and the region will continue to drop in the first half of this year because of the economic slowdown.”
Delayed New Plants
The company has delayed construction of new cement plants in Indonesia and Cambodia because of slowing demand for the materials in those countries, said Kan. Its new cement plant in Indonesia would cost about 8 billion baht to build, said he said.
It may cost as much as 6 billion baht to construct a factory in Cambodia, Kan said in May.
Siam Cement closed unchanged at 105 baht in Bangkok trading. The stock has gained 1.9 percent this year compared with a 0.4 percent decline by the benchmark SET Index.
The company, founded by Thai King Vajiravudh in 1913 and controlled by the Crown Property Bureau, the King’s asset-management arm, has businesses ranging from cement and petrochemicals to paper and building materials. Today’s quarterly loss was the first since the three months to Dec. 31, 2000.
To contact the reporter on this story: Anuchit Nguyen in Bangkok at anguyen@bloomberg.net
5 comments:
This is not good for Cambodia. The Thai is one of our biggest investors in SEA.
Bhumibol owns Siam Cement Conglomerate and Cambodia relies on this source only for its construction.
Hun Sen has no clue that his country is under Siam choke hold now.
Well, did the US has any clue that it's being stranglehold by China?
US borrows not begs from foreign countries.
Hun Sen does not have pride and dignity.Ask Hanoi,if Hun Sen did not beg for Prime Ministership in exchange in sell out his boss,Pen Sovan.
Hun Sen is so unqualified to be a dignified father or husband not to say a man.
Kasit insulted Sen like an imbecile but he has no spine to confront Kasit.
Bullshit, the US beg just like the rest of the third world.
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