SCG Ceramics forecasts dip in Q3 performance
SET‑listed construction materials producer, SCG Ceramics (COTTO), a subsidiary of SCG Cement-Building Materials, forecasts a drop in performance in the third quarter of 2021 because of the prolonged Covid-19 pandemic.
Managing director Nampol Malichai said the current wave of the pandemic will definitely have an impact on economic recovery and many business sectors in the third quarter this year.
"Uncertainties remain high as consumer purchasing power has not recovered," he said.
"If the severe outbreak ends quickly, confidence will resume and the situation in the fourth quarter will return to normal."
Mr Nampol said Thailand's economic growth in the second half will plunge lower than expected due to many negative factors, including the prolonged pandemic and new variants of the coronavirus.
These will have an impact on the economy, consumer spending, reopening plan, business closedown and layoff.
The pandemic may extend to the final quarter, depending on the government's management, he said.
"Our performance in the third quarter will likely decline 10% from the same period last year. The third quarter of 2020 saw a recovery as the country resumed business after the first wave and end of lockdown," Mr Nampol said.
"The lockdown of construction sites recently has also affected us."
He said the company continues to control production capacity to be in line with demand. It will also support suppliers that have felt an impact by extending payment deals.
In the second quarter of 2021, SCG Ceramics reported a net profit of 177 million baht on revenue of 2.8 billion baht.
Revenue in the first six months totalled 5.61 billion baht, a rise of 12% from the same period last year with a net profit of 364 million baht, an increase of 119%.
Sales growth in the first half were from local demand and export markets which boosted a total sales of 34.9 million square metres, up 11% year-on-year.
However, the average sales price declined by 1%.
"Despite a more severe situation than last year, our key distribution channels including modern trade and large distributors are continuing their operation as usual, boosting sales in medium-to lower-end segments as expected," Mr Nampol said.
Meanwhile, first-half sales in neighbouring countries like Cambodia and Laos also declined due to the Covid-19 impact. The situation in the second half is not positive as the industry is still feeling the impact.