The analysts from Krungsri Securities forecast that SCC’s overall performance in 1Q25 will generate a small profit. Although the result is slightly better than the performance in 4Q24, it is still low compared to the same period of last year. The recovery from 4Q24 came from the cement business which earned more sales following the government project. Petrochemicals also made a recovery due to China’s demand for restocking.
The firm expected net profit in 2025 to recover when compared to 2024’s (low base) following the recovery of the petrochemical business. The business is currently facing a challenging time as the factory in Vietnam, Long Son Petrochemicals (LSP), remains suspended until the second half of 2025, when the product spread will make a recovery. Meanwhile, the delay of Commercial Operation Date (COD) on the new factory will result in a tighter supply in the market.
Although it is expected that the loss in 4Q24 will reach 926 million baht (compared to the loss of 1.13 billion baht in 4Q23 and a profit of 721 million baht in 3Q24), the loss remains smaller compared to the same period of 2023 to the lack of depreciation of the cement business in Myanmar that dragged down the sales in 4Q23.
However, the petrochemicals side is being oversupplied by the new production capacity, while also carrying the LSP project’s fixed costs that started the COD but stopped due to the spread level being lower than cash cost. These fixed costs, which came in for the full quarter, also dragged down the petrochemical business, and the dividend sharing from its automotive business could not fully compensate for this burden. Meanwhile, the packaging business must face high competition, causing a decrease in profit margin and the loss of profit from interest rate contracts.
Therefore, the normalized profit forecasts for 2024 to 2026 were revised to THB 5,133 million, THB 13,574 million and THB 22,364 million, respectively. This reflects the lower-than-expected recovery in the cement business and the higher-than-expected LSP’s fixed costs. The target price for this year was also revised from 220 baht to 175 baht.
