Siam Cement Group (SCG) may increase its five-year investment budget from 100 billion baht as the country's top industrial conglomerate is spreading its investments outside Southeast Asia with ongoing talks to acquire a petrochemical company in the US.
SCG projects total revenue will rise by about 10% this year. Yesterday, it reported a 26% jump in total revenue to 301.3 billion baht for 2010, well above the 10% forecast.
The industrial conglomerate also posted a record-high net profit of 37.38 billion baht last year, a rise of 54% year-on-year with earnings growth in most key businesses and dividends.
SCG Chemicals accounted for almost half of the group's revenue, with sales of 144 billion baht, up 43%. Its earnings surged 80% to 22.6 billion, thanks to an 8.8-billion-baht extraordinary profit from the divestment of its shares in PTT Chemical in the final quarter.
The paper business earned 51.7 billion baht in revenue, rising 21%, as net profit grew 53% to 3.49 billion.
The cement unit, meanwhile, reported a 3% drop of earnings to 6 billion despite the 5% increase in revenue to 48.95 billion.
In last year's fourth quarter, the group's earnings jumped by 213% to 16.67 billion baht on sales of 76.25 billion, an increase of 23% from the same period of 2009.
President and chief executive Kan Trakulhoon said rising interest rates and high oil prices might affect domestic consumption of industrial products by pushing up their prices. SCG consequently might be forced to export more with lower margins.
Export revenue amounted to 30% of the group's total sales last year, with another 7% earned from subsidiaries operating in Asean, he added.
Given revenue and profit growth, Mr Kan said the group now has extra cash of 70 billion baht with net debt reduced from 120 billion baht to below 84 billion.
"Our financial status is now the strongest historically, enabling us to be more proactive in overseas investments. There is a possibility that our five-year investment plan (2011-15) will be higher than 100 billion baht announced earlier," said Mr Kan.
"We have discussed mergers and acquisitions in high-value-added products in the US."
He said the group invested 150 billion from 2005-10.
In Asean, talks have been pursued to acquire companies in corrugated containers and building materials. Meanwhile, it is highly likely that SCG would invest in a new cement plant in Indonesia while its petrochemical joint venture in Vietnam is at the stage of finalising the financial arrangements.
"The company has looked at investment opportunities in Burma including in Dawei. We believe economic development in Burma will be fast now that the political situation is improving. After all, it has in abundance natural resources including natural gas," said Mr Kan.
Shares of Siam Cement (SCC) closed yesterday on the Stock Exchange of Thailand at 313 baht, up 2 baht, in trade worth 2.36 billion baht.
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