Siam City Cement reports 45% profit increase for Q4

Profit also increased by 16 per cent quarter on quarter, reflecting high efficiencies and utilisation of assets, the company said.
For the full year, both revenues and earnings moderated. Net sales were Bt31.1 billion, slightly lower by 2 per cent because of weaker pricing of construction materials.
Cash generation in 2015 was solid, with 6-per-cent year-on-year growth in cash flows from operating activities due to efficient management of working capital.
A total dividend of Bt15 has been proposed by the board of directors out of 2015 earnings. The final dividend of Bt7 will payable in May after approval by shareholders in April, while an interim dividend of Bt8 was paid in August 2015.
Vorathep Rangchaikul, chief executive officer of Siam City Cement, said the profit for the fourth quarter increased by 45 per cent year on year thanks to efficient production operations at high-capacity utilisation and cost savings harnessed through investments in industrial assets as well as lower energy prices.
In addition, non-recurring income items enhanced the increase by about 14 per cent year on year.
Vorathep said business challenges last year included lower domestic sales volume and prices in the face of weaker demand in most of the key businesses, which led to a 2-per-cent decline in net sales.
“Nevertheless, our core cement business has continued to benefit from lower coal prices and electricity tariff rates. In addition, operational efficiencies and procurement savings initiatives have contributed to the reduction of production costs. This has helped the company maintain a gross margin of 44 per cent, despite the challenging business environment.
“Profit for the year, however, declined by 10 per cent to Bt4.6 billion because of higher depreciation, financial expenses and lower earnings from associates offset by a non-recurring income item (1.2 per cent).
“However, cash flow improved by 6 per cent with optimal balance of both customer and supplier credit terms and good control of inventory levels.
“Main investments during the year included a greenfield cement plant in Cambodia, expansion of cement-grinding capacity at Saraburi and a new state-of-the-art digital technology platform, which was successfully deployed on October 1.
“The cement market is foreseen to grow moderately in the first quarter of 2016. We will not likely see drastic growth until the implementation of the infrastructure mega-projects.
“The supply will continue to exceed the domestic demand, especially with newly added capacity of the domestic cement producers. SCCC’s key approach is to produce at competitive cost, [maintain] quality and maintain market share during this difficult situation by offering the best value to our customers.”