Thursday, October 01, 2020

Poor 1Q performance forces SCG to revise downward its 2020 target

Apr 30. 2020
Roongrote Rangsiyopash
Roongrote Rangsiyopash
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By The Nation

Siam Cement Group (SCG) has revised downwards its revenue projection for the year and cut some of its investment plans after sales fell by 6 percent in the first quarter due to the Covid-19 crisis.

“The company’s unreviewed operating results for the first quarter registered revenue from sales at Bt105.7 billion, marking a 6 percent decrease year-on-year mainly from a drop in chemical prices due to weak global demand,” said Roongrote Rangsiyopash, president and CEO of SCG. 

“However, the revenue was similar to the previous quarter, with a rise in earnings from cement-building materials and packaging businesses off-setting a drop in revenue from chemicals.” 

The group’s first quarter profit of Bt6.97 billion also marked a sharp 40 percent decline y-o-y and a 2 percent drop quarter on quarter in line with decreased product margins in the chemicals business. 

“We have revised downward our projection of sales this year, but we cannot come up with an exact number because it depends on how long the Covid-19 outbreak will last,” Roongrote said. “The company will also cut capital spending to between Bt55 billion and Bt65 billion from the previous plan of between Bt60 billion and Bt70 billion.” 

He added that the group will move carefully in terms of mergers and acquisitions, though SCG’s financial position remains strong and it can withstand risks for another year or more. 

Meanwhile, the conglomerate’s revenue from businesses outside Thailand, including exports, in the first quarter came in at Bt44.86 billion or 42 percent of total revenue from sales, marking an increase of 3 percent y-o-y. However, earning from export only came in at Bt24.32 billion or 23 percent of total revenue from sales, down 9 percent y-o-y.

SCG’s total assets as of March 31 stood at Bt708.93 billion, 34 percent of which represents assets in Asean. 

Roongrote said with global economies badly affected by the pandemic, SCG is among the few companies that is putting forward its best efforts to maintain its operating results of this year’s first quarter closer to that of the previous quarter in order to help society, partners, employees and businesses pull through this tough time. 

The company plans to keep its businesses up and running with a solid continuity management plan along with an intensive disruption response plan as well as strict adherence to the government's health and safety measures. 

SCG said it has leveraged digital technology to help more than 90 percent of its employees to work from home and has streamlined end-to-end supply chain management to ensure products, services and solutions are delivered in a convenient and safe manner. 

The company is also seeking new opportunities to serve evolving needs, such as shifting sales to online platforms or considerably catalysing the use of Blockchain for procurement, invoicing, and payment with partners. Plus, it continues to maintain a strong financial position and is attuned to challenges if the situation is prolonged. 

SCG has also leveraged its expertise, innovations and technologies to collaborate with medical doctors and experts to develop a series of Covid-19 prevention innovations. The innovations are designed to reduce the risk of infection among medics, including Modular Screening and Swab Units developed by SCG HEIM and Living Solution technology, Mobile Isolation Unit created by Chemicals Business.

Apart from this, the SCG Foundation has handed over Bt50 million worth of equipment and donated cash to needy hospitals, he said.

Meanwhile, SCG’s board of directors has agreed to postpone the year’s annual general meeting to June 8 at the group’s headquarters in Bang Sue. 

In line with strict prevention measures, the number of participants will be limited and strict hygiene and safety protocols as well as social-distancing measures will be applied at the meeting, Roongrote added.

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