SCG sticks to revenue goal despite Q1 decline
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SCG Group is maintaining its full-year revenue growth target at between one per cent and 2 per cent, even though income during the first quarter fell 10 per cent from the same period last year to Bt109.27 billion, president and CEO Kan Trakulhoon said yes
SCG Group also announced a first-quarter net profit increase of 32 per cent to Bt11.07 billion, thanks to the wide spread in its chemicals business between raw-material costs and finished products.
“Our overall revenue declined in the period following a drop of up to 20 per cent in chemical product prices compared with the first quarter last year, while demand for cement and building materials fell by up to 2 per cent.
“However, we continued to post a high net profit because of the spread between chemical raw-material costs and finished products, which averaged US$600 (Bt19,710) per tonne a year ago but rose to $800 in the first quarter. This boosted our net profit to strong growth during the quarter,” he said.
Meanwhile, the group forecasts that its overall revenue for the remaining three quarters of the year will recover, with demand for cement and building materials now showing positive signs and rising oil prices driving up chemical prices, said Kan.
He predicts that demand for chemical products will increase by between 4 and 5 per cent this year, while cement and building materials will see demand rising in the second half when the government’s investment in infrastructure projects starts to kick in.
Demand for paper has steadily expanded so far this year, he added.
Last year, SCG Group posted total revenue of Bt487.54 billion and made a net profit of Bt33.61 billion.
Meanwhile, the group has set aside an investment budget of between Bt50 billion and Bt60 billion for this year.
Up to Bt20 billion will be spent on investment in its four cement plants in Asean countries, while Bt4.12 billion is earmarked for the second production line of Vina Kraft Paper in Vietnam, and Bt4.8 billion is for research and development – up 77 per cent from the Bt2.7 billion spent on R&D last year.
The remainder of the Bt50 billio-Bt60 billion will be used for merger and acquisitions both domestically and overseas, said the group’s vice president, financial and investment, Chaovalit Ekabut.
The investment programme will be funded from cash flow and the issue of a debenture worth Bt30 billion earlier this month, he said.
“As a result, we are confident our revenue this year will grow to meet the target, although the first quarter saw a year-on-year drop of 10 per cent,” he added.
