Siam City Cement Plc, Thailand's second-largest cement maker, yesterday reported a drop in net profit for the third quarter and the first nine months due to weak prices even though sales have surged.
Third-quarter net profit fell 8.8% year-on-year to 792 million baht, while revenue grew 7.7% to 6.59 billion baht.
For the nine-month period, net profit dropped 5.3% from a year earlier to 2.88 billion baht as revenue increased 10.8% to 20 billion, according to SCCC's filing to the Stock Exchange of Thailand.
''Strong cement consumption driven by infrastructure projects, commercial expansion and the growth of border markets could expand sales by 15%,'' said managing director Philippe Arto.
Sales of ready-mixed concrete volume increased by 9%, mortar 49% and wood-substitute Conwood products by 24%.
''Market prices remain under intense competitive pressure and do not reflect the increase in electricity rates, transport costs and minimum wages impacting third party services,'' said Mr Arto.
Energy-saving initiatives such as waste-heat recovery and the use of alternative fuels generated greater benefits in 2012 than last year, he said.
Earnings per share amounted to 3.44 baht in the third quarter, down from 3.77 baht in the same period of last year, while earnings per share declined to 12.52 baht from 13.22 baht in the first nine months of last year.
Operating profit margin was down to 17.4% for the first nine months, from 21.6% a year earlier. Also, a one-time charge of 226 million baht resulting from the liquidation of a dormant subsidiary affected net profit.
''The industry outlook for the remainder of 2012 looks solid with continuing strong demand, whilst the main challenge remains the restoration of operating margins at a level that supports capacity expansion in fast-growing markets,'' noted Mr Arto.
Employees of affiliate Siam City Concrete Co have been active in the Green Heart Club, constructing training grounds for border patrol police schools. A new social enterprise approach is being developed for products made by villagers living near SCCC plants in Saraburi.
SCCC shares closed down 7% on the SET yesterday to 424 baht, the largest drop since June 18, in trade worth 95.42 million baht.