Bangkok--29 Jul--SCG
SCG's operating results for Q2 and the first half of 2015 see an increase in profit from the chemical business whose global market margin grew, despite slowdown in other domestic businesses. However, SCG foresees economic recovery in Thailand for the second half of the year from the government's economy-stimulating initiatives and is pushing ahead with its ASEAN investments according to plan. SCG also announces a dividend payment of 7.5 Baht per share.
Mr. Kan Trakulhoon, President and CEO of SCG, said that the operating results (unreviewed) for Q2/2015 show Revenue from Sales is at 113,818 MB, a 9% y-o-y decrease and a 4% q-o-q increase. Profit for the Period stands at 13,877 MB, a 63% y-o-y increase and 25% q-o-q increase, thanks to the much higher global market margins in the chemical business as a result of a significant drop in the prices of raw materials and crude oil. Even though businesses for domestic Cement-Building Materials and Packaging continue to slow down, there are signs of recovery for the second half of the year from the government's economy-stimulating scheme. SCG's Revenue from Sales for the first half of 2015 stands at 223,094 MB, a 10% y-o-y decrease. Profit for the Period for the first six months of 2015 is at 24,950 MB, a significant y-o-y increase of 48%.
As for businesses within ASEAN outside of Thailand which includes revenues generated from its operations in ASEAN and from exports within the region, in Q2/2015, SCG has recorded a Revenue from Sales of 25,724 MB, a slight decreased y-o-y due to the slowdown of the building materials market in Indonesia and the drop in chemical prices. For the first half of 2015, Revenue from Sales from SCG's businesses in ASEAN stands at 49,846 MB, this account for 23% of the total Revenue from Sales, a portion increase compared to the 21% in the first half of 2014. SCG's total assets in ASEAN as of June 30, 2015 are worth 95,955 MB, or 19% of the total assets, an increase from SCG's total assets in ASEAN as of June 30, 2014 which was worth 76,811 MB.
SCG's total assets as of June 30, 2015 are worth 500,837 MB.
The Q2 and first half of 2015 operating results by major business units are as follows:
SCG Cement – Building Materials recorded a Q2/2015 Revenue from Sales of 45,663 MB, a 2% y-o-y decrease and a 3% decrease q-o-q. Q2/2015 Profit for the Period is at 2,896 MB, a 16% y-o-y decrease and 19% decrease q-o-q. Revenue from Sales for the first half of 2015 is at 92,744 MB, a 1% y-o-y decrease. Profit for the Period for the first six months of 2015 is 6,454 MB, a 15% y-o-y drop.
SCG Chemicals recorded a Q2/2015 Revenue from Sales of 53,636 MB, a 17% y-o-y drop and a 12% increase q-o-q. Q2/2015 Profit for the Period is at 9,182 MB, a staggering 306% y-o-y increase and 86% increase q-o-q, due to the significantly higher global market margins thanks to the drop in the prices of raw materials and crude oil and inventory stock adjustment gain. For the first half of 2015, Revenue from Sales is at 101,592 MB, a 19% y-o-y decrease. Profit for the Period is at 14,120 MB, a 198% y-o-y increase, due to healthy margins and improved equity income from associates.
SCG Packaging recorded a Q2/2015 Revenue from Sales of 17,172 MB, an 8% y-o-y increase but similar to the previous quarter. Q2/2015 Profit for the Period is at 764 MB, a 14% y-o-y decrease and a 13% q-o-q decrease. For the first half of 2015, Revenue from Sales is at 34,283 MB, an increase 8% y-o-y from higher sales volume in both Packaging chain and Fibrous chain. Profit for the Period is at 1,642 MB, a decrease 23% y-o-y, mainly due to higher depreciation and financial costs.
Mr. Kan added "For the first half of this year, domestic cement sector benefited from economy-stimulating policies. Thanks to the government, the negative domestic cement demand since Q3 of 2014 until Q1 of 2015 rose for the first time. The Q2 of 2015 demand saw an increase of 2% due largely to the 11% growth in the government sector and a 1% growth for the commercial sector. These signs of recovery combined with the continued effort to build basic infrastructure and other small projects by the government will boost the domestic economy and inspire confidence in investors."
For international markets, SCG found that in the second quarter, demand in cement also continued to rise, especially in Myanmar and Cambodia, where demand rose by 19% and 12% y-o-y respectively, as SCG's cement is a popular choice and highly regarded for its quality. Moreover, SCG's investments in ASEAN will continue to push ahead as planned. Currently the cement plant in Cambodia has begun its 2nd operation line, while operation at the plant in Indonesia will also commence at the end of the year. Construction of the production base in Myanmar will be completed in 2016, while in Laos, the plant will be finished in 2017, ready for the expected increase in demand by ASEAN consumers.
As for High Value Added or HVA products in Q2/2015, SCG recorded a Revenue from Sales of 82,408 MB, a 3% y-o-y decrease due to the significant drop in chemicals prices, despite a larger sales volume. This portion accounts for 37% of the total Revenue from Sales. SCG eco value products generated a Revenue from Sales of 59,311 MB, a 13% y-o-y increase, accounting for 27% of the total Revenue from Sales.
In addition, The Board of Directors of SCG has approved a H1/15 interim dividend payment of 7.5 Baht per share (9,000 MB), which is payable on August 27, 2015 (XD-date on August 10, 2015, record date on August 13, 2015 and book closing date on August 14, 2015.