Bangkok--3 Nov--SCG
SCG announced the operating performance for the third quarter of 2014, showing increased revenue from sales due to higher chemicals prices but lower profitability as there was a non-recurring gain in Q3/2013. The company announces its plan to make an investment of over 3,000 MB in Cement-Building Materials business and HVA products, following its vision to become the ASEAN sustainable business leader.
SCG also announced its fourth consecutive year record of the Global Industry Leader in the Construction Materials industry listed by the Dow Jones Sustainability Indices (DJSI).
Mr. Kan Trakulhoon, President & CEO of SCG, disclosed the unreviewed consolidated financial statements of SCG and its subsidiaries for Q3/2014, which showed Revenue from Sales of 124,275 MB, an increase of 9% y-o-y, largely due to higher chemicals prices, while flat q-o-q. The Profit for the Period registered 7,846 MB, a decrease of 20% y-o-y, as there was a non-recurring gain of 1,701 MB (fair investment value adjustment of sanitary ware and fittings assets, and sale of assets to TOTO) in the Cement –Building Materials business in Q3/13.
For the first nine months of 2014 (9M/2014), SCG recorded Revenue from Sales of 370,835 MB, an increase of 12% y-o-y. Profit for the Period registered 24,759 MB, a decrease of 13% y-o-y, which is largely attributed to the non-recurring gain of 1,701 MB in Q3/2013, the increase in non-controlling interests (minority interest), and lower equity income from associated companies.
For the operating results of SCG in ASEAN (excluding Thailand), the Revenue from Sales in 9M/2014 amounted to 32,565 MB, a growth of 16% y-o-y, and representing 9% of SCG’s total Revenue from Sales. The Revenue from Sales in Q3/2014 amounted to 11,204 MB, a growth of 9% y-o-y, and representing 9% of SCG’s total Revenue from Sales, due to increased sales of Vina Kraft, the largest and modern packaging paper mill in Vietnam, and Prime Group, Vietnam's largest ceramic tile manufacturer, as well as ready-mixed concrete and cement in Cambodia. As of September 30, 2014, total assets of SCG in ASEAN (excluding Thailand), amounted to 79,235 MB, which is 17% of SCG’s total consolidated assets.
The total assets of SCG as of September 30, 2014 amounted to 473,405 MB.
The operating results of SCG’s major businesses for Q3/2014 were as follows:
SCG Cement-Building Materials: In Q3/2014, SCG Cement-Building Materials recorded Revenue from Sales of 46,382 MB, an increase of 2% y-o-y as a result of the sales increase from the ASEAN operations and higher export sales. Profit for the Period dropped 43%y-o-y to 3,072 MB since there was a 1,701 MB in non-recurring gain in Q3/2013.
SCG Chemicals: In Q3/2014, SCG Chemicals recorded Revenue from Sales of 64,337 MB, a decrease of 1% q-o-q as a result of decreased polyolefin products sale volume, but increased 15% y-o-y due to higher product prices. Profit for the Period registered 4,188 MB, an increase 85% q-o-q, with improved margins and contribution from associated companies, and grew 10% y-o-y due to improved margins.
SCG Paper: In Q3/2014, SCG Paper recorded Revenue from Sales of 16,276 MB, up by 3% q-o-q and 9% y-o-y, due to higher sales volume in both the Fibrous Chain and the Packaging Chain. Profit for the Period registered 715 MB, a decrease of 19% q-o-q and 10% y-o-y, as a result of lower EBITDA generation.
Mr. Kan added that, in the last quarter of 2014, the economic trend will see an upturn with more significant turn appearing in 2015. SCG believes that the Thai and ASEAN economy will continue to sustain its vigor, so the company continues to invest more in the region. Recently, the Board of Directors of SCC has approved a total investment of over 3,000 MB which consists of approximately 2,800 MB investment towards a 2 million ton HVA mortar plants in Khon Kaen and Lampang, with an expected start up in H1/16. Mortar is a finishing product used in the wall applications with the benefits of quality consistency, ease of use, and complementary to lightweight concrete blocks. Another investment is the construction-related Retail Business in ASEAN with an approximate 200 MB investment for a 50% stake in Global House International Company Limited. This investment is SCG’s ASEAN growth platform in the construction-related warehouse retailing leveraging on SCG’s market leadership and business network in this region.
SCG continues to follow up on the investment schemes it had previously planned for ASEAN with the cement plants in Indonesia and the second line of cement plant in Cambodia expected to start their operations in 2015. The petrochemical complex in Vietnam is scheduled to be concluded its financial planning earlier next year. Also, the company is looking to invest in R&D of Precast Concrete Panel, a precast concrete wall system using a special formula mortar in place of conventional masonry and plastering. The system provides added strength, offers quick and easy installation, and significantly reduces installation time and expenses. Now, SCG is constructing two new plants in Chonburi and Hemaraj Industrial Estate in Saraburi which will start operating in second quarter of 2015.
With SCG’s strategy to become an ASEAN sustainable business leader, in Q3/2014, HVA products sales amounted to 42,582 MB, an increase of 14% y-o-y, the equivalent to 34% of SCG’s total sales. Furthermore, SCG’s sales of “SCG eco value” products amounted to 36,091 MB, the equivalent to 29% of SCG’s total sales, an increased from the 7% y-o-y.
SCG has been operating its business with principles of sustainability. It has strived to strike a social, economic and environmental balance. Recently, SCG has been assessed and classified by the Dow Jones Sustainability Indices (DJSI) to be the Global Industry Leader in the Construction Materials industry for the fourth consecutive year and to be the Gold Class for the seventh consecutive year since 2008. This recognition reflects SCG’s determination to bring the utmost benefits to society, environment, and all stakeholders, as well as efforts to move every sector forward to applying the sustainable development concept for practical use and to extend the sustainable development network in the country and ASEAN.