Bangkok--26 Apr--SCG
SCG announces Operating Results for Q1/2017, showing profit increase 29% y-o-y, thanks to the Chemicals business. ASEAN investments prominently prosper with the collaboration with partners in Vietnam towards the first petrochemicals complex that shall enhance competitiveness and efficiently support ASEAN business growth. Also, cement plants in Laos PDR and Myanmar began commercial operation, fulfilling the construction sector demand. SCG has recently invested in a cement plant and packaging business in central Vietnam and Indonesia respectively. This is in respond to the growing consumer goods market in Thailand and ASEAN which continues to propel demands for packaging.
Mr. Roongrote Rangsiyopash, President and CEO of SCG, disclosed the company's unaudited Operating Results for Q1/2017, with registered Revenue from Sales grew by 6% y-o-y to register 116,268 MB. Profit for the Period reached 17,386 MB, an increase of 29% y-o-y, attributed mainly from the continuous good performance of the chemicals business and non-recurring gain from the sale of investment assets and non-used assets. In addition, export Revenue, which accounted for 27% of SCG's total Revenue from Sales, y-o-y to 31,044 MB.
The Q1/2017 performances of SCG's businesses in ASEAN
The consolidated 2017 Revenue from Sales of SCG's ASEAN production facilities and Thai exports to ASEAN countries amounted to 25,918 MB representing 23% of SCG's consolidated Revenue from Sales, a flat y-o-y. As of 31 March 2017, SCG's total assets in ASEAN excluding Thailand stands at 137,144 MB or 24% of the company's total assets.
The total assets of SCG as of March 31, 2017 amounted to 562,170 MB.
The Q1/2017 operating results by business units are as follows:
SCG Chemicals recorded Q1/2017 Revenue from Sales of 54,271 MB, increased 14% y-o-y and increased 27% q-o-q. The business unit registered Profit for the period of 13,367 MB, an increase of 34% q-o-q and 49% increase y-o-y due to the ramp up in operating rate of ROC, following the turnaround in Q4/16. Additionally, there is a contribution of 1,431 MB after tax non-recurring gain from the sale of investment assets.
SCG Cement - Building Materials recorded a Q1/2017 Revenue from Sales of 44,824 MB, which decreased 2% y-o-y and increased 9% q-o-q. The business unit registered Profit for the period of 2,468 MB, a decrease of 25% y-o-y as domestic demand of cement-building materials has not yet recovered from last year's flood in Southern part of Thailand, but increased 136% q-o-q on seasonal factors. In addition, the investment in the domestic construction industry was lower than last year, affecting demand and competitiveness in the market.
SCG Packaging recorded Q1/2017 Revenue from Sales of 19,841 MB, increased 5% y-o-y and increase 8% q-o-q. The business unit registered Profit for the period of 1,696 MB, an increase of 35% y-o-y and increase of 171% q-o-q. The increase mainly was a result of sale of printing and writing paper assets.
Mr. Roongrote mentions that "SCG's investment in ASEAN is in line with the vision. Recently, SCG increased investments to 71% in the Long Son Petrochemicals project, the first integrated petrochemicals complex in Vietnam. The project is located in Ba Ria-Vung Tau province near Ho Chi Minh City, a location with promising economic growth. The project has incorporated state-of-the-art technology which possesses international standards for health, safety, and the environment in its operation. At present, SCG is in the final stage of financial investment decision with Vietnamese partner.The construction time is expected to be 5-year period with plans for commercial operations in 2022.
For the Cement-Building Materials business, SCG acquired the Vietnam Construction Materials JSC ("VCM"), an integrated cement operator in Vietnam, holding a production capacity of 3.1 million tons per year. The complex, located in the central Vietnam at Quang Binh province, will serve nearby market in the first phase with plan to later serve throughout the country. In this Quarter, as the cement plant in Myanmar has begun commercial operations in January 2017, another cement plan in Laos PDR has also begun its commercial operations in March 2017. Hence, offering SCG with a combined cement production capacity in ASEAN, excluding Thailand, of 10.5 million tons per year.
In the Packaging business, SCG invested in Indocorr, Indonesia's producer of high-quality corrugated containers with a capacity of 32,000 tons per year totaling to SCG's combined packaging production capacity of 1,045,000 tons per year. Additionally, SCG constantly seeks opportunities for investments in both the paper and flexible packaging business to commit to serving the rapidly growing packaging demand in Thailand and ASEAN as well as the behavioral shift in consumers' lifestyles who prefer to dine outside of homes"
In Q1/2017, SCG's Sales of HVA products and services was at 43,759 MB, accounting for 38% of the total from Sales.