SCG forecasts 5-10% revenue growth

SIAM CEMENT Group expects revenue growth of 5-10 per cent this year amid signs that the economy is recovering, especially as the government kicks off major investments in infrastructure projects.
Last year, in the group’s unaudited operating results, SCG reported sales revenue of Bt423.44 billion, down by 4 per cent from 2015, while net profit was Bt56.08 billion, an increase of 24 per cent.
SCG’s board of directors approved a dividend of Bt19 per share for shareholders registered as of April 7, 2017.
The group has set aside an investment budget of between Bt60 billion and Bt70 billion to expand its operations in Vietnam and for mergers and acquisitions both domestically and in Asean countries this year, SCG president and chief executive officer Roongrote Rangsiyopash told a news conference yesterday.
He said the investment budget was higher than last year’s, which was only Bt30 billion, because its planned investment in the Vietnamese petrochemical industry had been delayed until this year.
Meanwhile, SCG will expand domestically and overseas both with new investments and by acquiring major stakes in other companies, depending on the business opportunity, he said.
The investment budget will come from the company’s cash flow as well as a debenture issue worth Bt25 billion in April, which will replace an existing debenture that will expire that month.
Chief financial officer Chaovalit Ekabut said SCG would maintain its net debt-to-EBITDA (earnings before interest, taxes, depreciation and amortisation) ratio at no more than 2.5 times. Last year the ratio was 1.5 times.
Roongrote said the company would focus on developing high-value-added products by setting a research-and-development budget of about 1 per cent of its total revenue. This would back strong growth of its net margin during a period of high competition from both domestic and foreign rivals.
Last year, SCG recorded sales of high-value-added products of Bt160.91 billion, or 38 per cent of its total sales. This year, it aims to take that proportion up to 40 per cent of the total, Chaovalit said.
Roongrote said Thailand’s economy appeared to be trending towards an upturn, while Asean markets continued to prosper. As a result, SCG is confident of strong sales growth overall.
At the end of 2016, SCG had assets in Asean worth Bt126.05 billion, or about 23 per cent of its total asset value. It reported that revenue from its businesses in and exports to Asean totalled Bt97.66 billion, down by 2 per cent from 2015, as it faced high competition.
However, it expects its sales revenue from Asean will grow when its cement plant in Myanmar and its second kraft paper plant in Vietnam begin commercial production early this year, he said.
The Myanmar cement plant has production capacity of 1.8 million tonnes per year, while the annual capacity of the Vietnam paper plant is 243,000 tonnes. 
“Although this year will have business risks from rising costs due to higher oil prices and unpredictable impacts on the global economy from the policies of the new US president, we are confident our business will maintain growth, as we have a strategy to balance our portfolio in the domestic and Asean markets,” Roongrote said.