BANGKOK – SCG, or Siam Cement Group Public Company Limited, and its subsidiaries announced total sales revenue of 252,461 million baht for the first half of 2024, remaining stable compared to the same period last year. The flat revenue was mainly due to lower sales in the cement and building materials businesses, attributed to seasonal market softness in Thailand. This was despite increased sales volumes from SCG Chemicals and SCGP. Notably, sales from overseas operations and exports from Thailand totaled 111,367 million baht in H1 2024, accounting for 44% of total sales.
EBITDA (earnings before interest, taxes, depreciation, and amortization) decreased by 10% year-on-year to 28,889 million baht. Net profit declined by 75% year-on-year to 6,133 million baht, primarily due to a one-time gain of 14,822 million baht from the fair value adjustment of investments in the first half of 2023. Excluding this, recurring net profit decreased by 37% year-on-year due to lower margins and expenses related to the LSP petrochemical complex.
Cement and Building Materials Business SCG’s cement and building materials business reported lower sales volumes compared to the previous quarter due to seasonal demand fluctuations. Profit from operations decreased by 16% quarter-on-quarter but remained flat year-on-year. The overall cement market in Thailand contracted by 9% year-on-year due to delayed government spending and weaker demand from mid-to-low income households and the private sector (approximately 60% of the market). However, the company expects a market recovery in the second half of the year, even though average cement prices in Q2 2024 were similar to the previous quarter. Meanwhile, markets in Vietnam and Indonesia have shown strong recovery, driven by government support in both countries.
Chemicals Business SCG Chemicals continued to be affected by soft demand due to geopolitical tensions and a slowing global economy. However, reduced market supply during planned maintenance shutdowns of other producers kept petrochemical prices stable, with average selling prices of HDPE and PP slightly increasing from the previous quarter.Although sales volume increased in the last quarter due to the resumption of operations at the Rayong Olefins Plant (ROC), the petrochemical industry is expected to remain soft in the second half due to lower global demand and new capacity entering the market.
Packaging Business SCGP’s sales revenue in the first half of 2024 increased by 3% year-on-year, with a 17% increase in net profit. SCG Decor’s sales revenue decreased by 7% year-on-year, but net profit surged by 167%.
Strong Q2 2023 Performance SCG reported improved performance in Q2 2024 compared to the previous quarter, with sales of 128,195 million baht, a 3% increase quarter-on-quarter, and a profit of 3,708 million baht, a 53% increase quarter-on-quarter. This was mainly driven by higher sales in the chemicals business and improved purchasing power in ASEAN markets, particularly Vietnam and Indonesia.
Outlook and Strategies Despite challenges from the global petrochemical downcycle, geopolitical conflicts, and a slow domestic economic recovery, SCG is adapting to strengthen its business. The company is focusing on energy cost management, high-potential businesses like solar energy, and leveraging digital technologies and artificial intelligence (AI) to enhance production efficiency and better meet customer needs. SCG is well-prepared to navigate these challenges with agility and stability, boasting 78,907 million baht in cash and cash equivalents, along with innovative solutions to meet diverse customer demands.
Overseas Operations SCG has been expanding its overseas operations, particularly in the ASEAN region, with investments in cement and building materials, chemicals, and packaging businesses. For example, the company has expanded its “Mitra 10” modern trade stores in Indonesia, launched “SCG Low Carbon Super Cement” in Vietnam, and formed a joint venture to open an Autoclaved Aerated Concrete (AAC) wall panel factory under the “ZMARTBUILD WALL by NXTBLOC” brand in India.
As of the end of Q2 2024, SCG had 78,907 million baht in cash and cash equivalents and 289,193 million baht in net debt, a 5,512 million baht increase from the previous quarter. The net debt to equity ratio remained at 0.6 times, the same as the previous quarter and Q4 2023.
The Board of Directors approved an interim dividend of 2.5 baht per share, totaling 3,000 million baht, for the first half of 2024, payable on August 23, 2024.
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