Bangkok--30 Jul--SCG
SCG announces the operating performance for the second quarter of fiscal year 2014 with increased revenue, benefiting from increased chemicals prices, but lower profits, due to the slowdown of domestic demand.
With confidence in sustainable economic growths of Thailand and ASEAN, the company continues developing High Value-Added (HVA) products and services as well as moves forwards to expand its business in Thailand and the ASEAN. SCG also announced interim dividend of 5.5 Bt/Share.
Mr. Kan Trakulhoon, President & CEO of SCG, disclosed the unreviewed consolidated financial statements of SCG for the second quarter of fiscal year 2014 (Q2/2014), which showed Revenue from Sales of 124,795 MB, an increase of 17% y-o-y, largely due to increased chemicals prices. The Profit for the Period registered 8,532 MB, a decrease of 14% y-o-y, following lower contributions from SCG Investment and decreased chemicals earnings, as well as the slowdown of domestic demand for building materials resulting in the increase in the less margin export proportion.
On a q-o-q basis, in Q2/2014, Revenue from Sales increased 2% q-o-q, while the Profit for the Period grew 2% q-o-q, benefitting from the seasonal dividend from SCG Investment, which compensated for the weaker q-o-q performances in all business units.
For the first half of 2014 (H1/2014), SCG recorded Revenue from Sales of 246,560 MB, an increase of 14% y-o-y due to gains from all business units. Profit for the Period decreased 10% y-o-y to 16,913 MB, following increased non-controlling interests (minority interest), FX gain in H1/13, and lower equity income from associated companies.
For the operating results of SCG in ASEAN (excluding Thailand), the Revenue from Sales in H1/2014 amounted to 21,361 MB, a growth of 20% y-o-y, and representing 9% of SCG’s total Revenue from Sales. The Revenue from Sales in Q2/2014 amounted to 11,100 MB, a growth of 17% y-o-y, and representing 9% of SCG’s total Revenue from Sales, due to increased sales of Prime Group, Vietnam's largest ceramic tile manufacturer, as well as ready-mixed concrete in Myanmar, and cement in Cambodia. As of June 30, 2014, SCG’s total assets in ASEAN amount to 76,811 MB, or 17% of SCG’s total assets.
The total assets of SCG as of June 30, 2014 amounted to 462,386 MB.
The operating results of SCG’s major businesses for Q2/2014 as follows:
SCG Cement-Building Materials: In Q2/2014, SCG Cement-Building Materials recorded Revenue from Sales increased 10% y-o-y to 46,378 MB, attributed to the improvement of Prime Group and consolidation of the sanitary ware and fittings businesses, and decreased 2% q-o-q, due to the Thai New Year season. Profit for the Period registered 3,445 MB, an increase of 2% y-o-y, but down 16% q-o-q.
SCG Chemicals: In Q2/2014, SCG Chemicals recorded Revenue from Sales of 64,958 MB, an increase of 7% q-o-q and 24% y-o-y, attributed to increased sales volume. Profit for the Period decreased 14% y-o-y and decreased 9% q-o-q to 2,259 MB, due to increased non-controlling interests, lower PVC margins, and decreased equity income from associates.
SCG Paper: In Q2/2014, SCG Paper recorded Revenue from Sales of 15,856 MB, down 1% q-o-q, due to lower sales volume in the Fibrous chain, but up 11% y-o-y, mainly due to higher sales volume in the Packaging chain. Profit for the Period registered 887 MB, down 29% q-o-q and 14% y-o-y.
Mr. Kan added that, SCG will continue to develop high value-added products and services to sustain its leadership in ASEAN. In H1/2014, HVA products sales amounted to 84,678 MB, an increase of 14% y-o-y and the equivalent to 34% of SCG’s total sales. Furthermore, SCG’s sales of “SCG eco value” products amounted to 74,338 MB, an increase of 46% and the equivalent to 30% of SCG’s total sales.
“The Thai economy during the first half has slowed down and is expected to continue in the third quarter. However, the increase of the consumer and business sector together with strong export expectation will contribute to the good turn-around in the economy in the last quarter and the shift shall become clearer in 2015. SCG is well prepared for the situation, since end 2013, we have expanded exports which resulted in a recorded revenue from exports in Q2/2014 at 37,794 MB, an increase of 33% y-o-y. The company expects exports to increase from the previous year thanks to the increased productivity and efficiency from all business units in export products. Also, SCG continuously move towards business expansion and make further movement on its projects in ASEAN such as cement plants in Lao PDR, Indonesia, Myanmar and Cambodia as well as the petrochemical complex in Vietnam, in order to become the sustained leader of the ASEAN business.” says Mr. Kan.
The Board of Directors of SCG approved to issue a new lot of debenture 2/2014 (SCC18OA) in the amount not exceeding 10,000 MB with the four-year maturity at a market interest rate when issuance. The new issuance is to replace the existing debentures SCC14OA in the amount of 5,000 MB to be retired for redemption on October 1, 2014, and issue a new tranche of debenture in the amount of 5,000 MB to support investments in the future. The new lot of debenture will be offered to (1) the holders of SCC14OA which are Individual Investors, (2) the holders of other debentures of SCC which are Individual Investors, and (3) other individual investors, in compliance with the law. After issuing a new lot of Debenture, SCC will have the total amount of debentures not exceeding 151,500 MB.
The Board of Directors has approved a H1/14 interim dividend payment of 5.5 Bt/Sh (6,600 MB), which is payable on Aug 28/14 (XD-date on Aug 7/14, record date on Aug 13/14 and book closing date on Aug 14/14).