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SCG Reports Operating Results for the First Quarter of 2014 Moving towards Business Expansion and Innovative Products Development to Become ASEAN Sustainable Business Leader

May 4, 2014

ENP Newswire - 02 May 2014

Release date- 01052014 - SCG announces the operating performance for the first quarter of fiscal 2014 showing increased revenue from growths from all business units, but decreased profits due to lower chemicals earnings.

The company recently announced the 12,000 MB investment in a new cement plant in Lao People's Democratic Republic, in addition to enhancing its HVA products by becoming ASEAN's first manufacturer of Glassine paper to serve the higher regional demands, and forming a joint venture with Florim to invest in the production facilities of high-end ceramics in Italy to strengthen its high-end ceramic line onto the global stance.

Mr. Kan Trakulhoon, President & CEO of SCG, disclosed the unreviewed consolidated financial statements of SCG and its subsidiaries for Q1/2014, which showed Profit for the Period of 8,381 MB, a decrease of 5% y-o-y, due to FX gain of approximately 1,000 MB in Q1/2013. Revenue from Sales increased 11% y-o-y to 121,765 MB, with growths from all business units.

On a q-o-q basis, Profit for the Period increased 5% q-o-q, and is attributed to the seasonal growths in the cement-building materials business, and the recovery of the paper business. Revenue from Sales increased 17% q-o-q from increased q-o-q sales in all business units.

As for SCG business in ASEAN market outside Thailand, the Revenue from Sales in Q1/2014 amounted to 10,261 MB, an increase of 24% from the same period of last year, and also amounts to 9% of SCG's total Revenue from Sales. Total assets of SCG in ASEAN as of March 31, 2014 amounted to 73,041 MB, which is 16% of total assets of SCG.

The total assets of SCG as of 31 March 2014 amounted to 459,231 MB.

The operating results of SCG's major businesses for Q1/2014 were as follows:

SCG Cement-Building Materials: in Q1/2014, SCG Cement-Building Materials reported Revenue from Sales of 47,512 MB, an increase of 10% y-o-y attributed to the consolidation of Prime Group, Vietnam's leading ceramic tiles manufacturer, and the sanitary ware and fittings business. Profit for the Period registered 4,114 MB, an increase of 2% y-o-y.

SCG Chemicals: In Q1/2014, SCG Chemicals reported Revenue from Sales of 60,826 MB, an increase of 14% y-o-y, as a result of higher product margin. Profit for the Period amounted to 2,480 MB, a decrease of 6% y-o-y, due to FX gain of approximately 900 MB in Q1/2013.

SCG Paper: In Q1/2014, SCG Paper reported Revenue from Sales of 15,953 MB, an increase of 6% y-o-y, due to higher sales volume in both packaging chain and fibrous chain. Profit for the Period amounted to 1,255 MB, a decrease of 6% y-o-y with higher depreciation and interest expenses.

Mr. Kan said, 'To become an ASEAN sustainable business leader, SCG continues to expand its business in the region. Recently, the Board of Directors of SCC has approved an investment approximately 10,000 MB to establish the first cement plant in Lao People's Democratic Republic. With its capacity of 1.8 Million tonnes per year, the plant is in the province of Khammouane and expected to start-up operation in Q2/2017. The plant will lead the way into sustainability with modern and environmental-friendly cement producing technology, becoming a good example of sustainable business and setting a new standard for other plants in the country to follow.

In terms of innovative products and High Value-Added products (HVA), the Board of Directors of SCC has also approved a total investment of 1,825 MB for SCG Paper to upgrade the machines and appliances used in the Thai Paper Co., Ltd., to manufacture Glassine paper, the new interleaving paper used in pressure sensitive labels, with the capacity of 60,000 tonnes per year. This investment has propelled SCG Paper to become the first company in ASEAN manufacturing Glassine paper, serving the increasing demands both locally and regionally. The new production is expected to start by early 2016.

In early April, SCG Cement-Building Materials has formed a joint venture with Florim Ceramiche S.p.A. (or 'Florim'), one of the leading global ceramic players, to invest in the production facilities of high-end ceramics, under COTTO brand. With total investment of 506 MB, SCG Cement-Building Materials will hold 33% stake. The plant will be located at Bologna (northern Italy), with a capacity of 5 million sq. m. per year and the expected start-up in early 2015.

For the business outlook 2014, SCG forecasted a slight decline in the overall demands for cement and construction materials, with an expected setback latter, within the country. However, the company has confidence in the stability of regional markets, foreseeing the gradual pick-up and growth in chemicals business, thanks to increased global demands that have been balanced by the economic cool-down in China. For paper business, the company foresees a better export within ASEAN, thanks to the region's constant demands and growth. SCG is confident on the overall ASEAN's long-term economic growth and will continue to invest in the region.

SCG recorded revenue from exports in Q1/2014 at 32,625 MB, an increase of 12% y-o-y. The company expects export will increase from the previous years. Currently, the export proportion of SCG increased 2% q-o-q from 25% to 27%.

In Q1/2014, HVA products sales amounted to 40,894 MB, the equivalent to 34% of SCG's total sales. Furthermore, SCG's sales of SCG eco value products amounted to 38,013 MB, the equivalent to 31% of SCG's total sales.


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Source: ENP Newswire

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