SCG reports Q3/2015 operating results showing an increased profit from better performance of chemical business. The company has pursued its HVA product and service strategy by developing SCG Eldercare Solutions for enhanced safety, comfort and quality of living for the elderly. In addition, the company has rebranded its "Tra Chang" brand to "SCG" in order to drive sustainable business growth in the ASEAN region.
Mr. Kan Trakulhoon, President and CEO of SCG, said that the unreviewed consolidated financial statements for Q3/2015 show Revenue from Sales at 110,898 MB, a 11% decrease y-o-y and a 3% decrease q-o-q, due to the lower sale prices of chemical products as a result of a drop in the prices of naphtha (crude oil). The company's Profit for the Period amounted to 9,001 MB, a 15% increase y-o-y due to the profit margins of chemical products which have continued to increase, despite a stock loss of 2,160 MB. For the first 9 months of the year, the Revenue from Sales amounted to 333,992 MB, a 10% decrease y-o-y. Profit for the Period of the first 9 months increased 37% y-o-y, amounted to 33,951 MB.
As for businesses within the ASEAN region outside of Thailand including revenues from operations in ASEAN and exports within the region in Q3/2015, the company has recorded a Revenue from Sales of 24,945 MB, an increase compared to the same period of last year. This is thanks to the rise in revenue from sales in Vietnam. For the first 9 months of 2015, SCG's Revenue from Sales from ASEAN operations and exports equal to 74,791 MB, a slight increase compared to the same period in 2014, despite the significantly lower prices of petrochemical products. To date, SCG's total assets in ASEAN are worth approximately 102,009 MB, or 20% of the company's total assets.
As at September 30, 2015, SCG's total assets stand at 507,266 MB.
The Q3/2015 operating results by company are as follows:
SCG Cement – Building Materials recorded a Q3/ 2015 Revenue from Sales of 43,570 MB, a 6% y-o-y decrease and a 5% q-o-q decline due to the drop in domestic market demand. The business unit registered Profit for the period of 2,073 MB, decreasing by 33% compared to the same period last year and dropping 28% from the previous quarter. For the first 9 months of 2015, the Revenue from Sales stands at 136,314 MB, a 3% y-o-y decrease due to the slow recovery of the Thai market. Profit for the period stands at 8,527 MB, a 20% y-o-y decrease.
SCG Chemicals recorded a Q3/2015 Revenue from Sales of 51,591 MB, a 20% y-o-y decrease and a 4% drop from the previous quarter, due to lower petrochemical prices as a result of the decline of crude oil prices. Profit for the period stands at 6,838 MB, a 63% y-o-y increase, but a 26% q-o-q drop, due to stock loss. For 9 months of 2015, Revenue from Sales is at 153,183 MB, a 19% y-o-y decrease. Profit for the period is at 20,958 MB, a 135% y-o-y increase.
SCG Packaging recorded a Q3/2015 Revenue from Sales of 18,217 MB, a 12% y-o-y increase and a 6% q-o-q increase. Q3/2015 profit for the period is at 645 MB, a 10% y-o-y decrease and 16% q-o-q drop due to depreciation and an increase in finance cost. For the first 9 months of 2015, Revenue from Sales is at 52,500 MB, a 9% y-o-y increase thanks to the large sales volume in both the Packaging and Fibrous chain. Profit for the period is at 2,287 MB, a 20% y-o-y drop.
Mr. Kan added "To strengthen our business operation and achieve sustainable growth in the ASEAN region, SCG has rebranded the 'Tra Chang Brand' to 'SCG' to enhance brand recognition and connection between the products and the organization. This helps to solidify the SCG brand and increases our competitive edge against leading brands in the global arena. Previously, the 'Tra Chang Brand' was used in Thailand and Laos, while in the other markets in ASEAN, we used the 'SCG' brand, which was recognized and trusted for the premium quality of the products. Rebranding from 'Tra Chang' to 'SCG' is part of our overall strategy to steer the organization towards becoming a sustainable leader in the ASEAN region."
The company's investment plans in ASEAN are on track, including the second line of cement plant production in Cambodia, and the cement plant in Indonesia which is scheduled to start-up for commercial operation at the end of this year, as well as the cement plants in Myanmar and Laos which are expected to commence operation in 2016 and 2017, respectively.
SCG will continue to create new innovations for high-value added or HVA products & services, thanks to the insight the company has on what customers truly want. For the first 9 months of 2015, Revenue from Sales of HVA products and services for the period stands at 124,072 MB, accounting for 37% of total Revenue from Sales, up from 34% the same period last year. Meanwhile, SCG eco value products generated a Revenue from Sales of 87,954 MB, accounting for 26% of the total Revenue from Sales. For the first nine months of 2015, the company has invested 2,354 MB towards research and development, 0.7% of the total Revenue from Sales. The total budget allocation for R&D for 2015 is 4,800 MB. For 2016-2017, the investment will increase to 6,700 MB and 8,300 MB, respectively.
In addition, SCG continues to build a network of product and service developments for organizations in Thailand and abroad, which allows for SCG to be able to offer products and solutions that truly address the lifestyle needs of customers. One such solution is the SCG Eldercare Solution which will enhance the quality of life for the elderly, allowing them to live more comfortably, safely and free from worry. With greater cooperation between the government and private sectors to push for R&D and commercial viability, the company is confident that this will further strengthen Thailand's competitive edge in the global arena.
To promote the development of new innovations and the networks for sustainable development in ASEAN, SCG is hosting the SCG Innovative Exposition 2015 to showcase several innovations created based on the "Innovation that Cares" concept. Visitors to the expo will experience living with innovative products and services as well as state-of-the-art technology. The expo is held on November 1-30, 2015 at SCG Experience (by the Ekamai – Ramintra Express Way). In addition to the exposition, SCG will also host an international panel discussion "Innovation for Sustainability" under the concept of "The Power of Collaboration." The event will be an opportunity for SCG's management responsible for mapping the company's sustainable development strategy to discuss and exchange ideas with management from top global firms about how to combine sustainable development with innovation. The event will be held on November 6, 2015 at Crystal Design Center, Bangkok.
The Board of Directors of SCC approved to issue a new lot of debenture no. 2/2015 (SCC19NA) in the amount not exceeding 10,000 MB with the four-year maturity at a fixed interest rate of 3.40% per annum. This new issuance is to replace the existing debentures SCC15NA in the amount of 10,000 MB to be retired for redemption on November 1, 2015. The new lot of debenture will be offered to individual investors as stated condition in the Debenture Prospectus. After issuing new lot of debenture, SCC will have the total amount of debentures not exceeding 166,500 MB.