Energy costs hit SCCC bottomline
Siam City Cement's nine-month sales climbed by 10.8 per cent to Bt20.02 billion from Bt18.08 billion in the same period of last year on growing demand, but net profit dropped 5.3 per cent to Bt2.88 billion from Bt3.04 billion on rising energy costs.
Earnings per share fell to Bt12.52 from Bt13.22.
On the back of strong cement consumption driven by infrastructure projects, commercial expansion and border market growth, SCCC could expand its sales in the domestic and border markets by 15 per cent. Ready-mix-concrete volume increased by 9 per cent, mortar by 49 per cent and Conwood by 24 per cent, the company said in a press release.
Key energy-saving initiatives such as waste-heat recovery and alternative fuels generated additional benefits compared with last year. However, market prices remained under intense competitive pressure and could not reflect the increase in electricity rates, transport costs and minimum wages affecting third-party services.
This resulted in a lower operating profit margin, at 17.4 per cent for the first nine months of 2012 compared with 21.6 per cent in the previous year.
A one-time charge of Bt226 million resulting from the liquidation of a dormant subsidiary has also had an impact on net profit.
The industry outlook for the remainder of this year looks solid with continuing strong demand, while the main challenge remains the restoration of operating margins at the level required to support capacity expansion in fast growing markets, the company said.
On the social-responsibility front, employees of Siam City Concrete Co, an SCCC-affiliated company, has been especially active in "Green Heart Club" activities both within the community surrounding its plant in Pathum Thani and in Prachuap Khiri Khan, where it constructed training grounds for visiting young people at the Rama VI Border Patrol Police Camp.
A new social-enterprise approach is being developed for the sale of products made by members of the Saraburi community surrounding the SCCC plants, to be anchored by the INSEE Green Park – now bestowed by Her Royal Highness Princess Maha Chakri Sirindhorn with the official name "Suan Ming Mongkol Chalerm Prachonmapansa 84 Pansa" or |the "Auspicious Garden commemorating HM the King’s 84th Birthday".
