Siam Cement lifts 2013 revenue target

CEO: Demand for building factories, residential sector still growing strong

Siam Cement Pcl raised its 2013 revenue target on a stronger outlook for the second half as Thailand’s largest industrial conglomerate profits from an increase in demand from South-East Asia’s rapidly growing economies and frontier markets.

The company, which reported a doubling of second-quarter profit yesterday, said it now expected second-half revenue to exceed the 216 billion baht (US$6.9bil) earned in the first half. As a result, it was lifting its full-year revenue target by 0.5% to 437 billion baht (US$14bil) from the previous target of 435 billion baht.

“Growth will be strong in the second half as private investment should continue to boost demand for building factories, while demand from the residential sector is still growing,” chief executive Kan Trakulhoon told a news conference. “Demand in SouthEast Asia is still growing. Even though there are concerns about a slowdown in Indonesia, our businesses there are still expanding well.”

The new target represents 7.2% of full-year revenue growth, up from 6% growth in the January–June period and in line with a forecast Kan had made in an interview with Reuters earlier this month.

The company’s rapid growth is emblematic of South-East Asia’s rise, where countries such as the Philippines, Indonesia and Thailand currently rank among the world’s strongest economies.

With that economic growth comes demand for the building and packaging materials that Siam Cement makes. Siam Cement is the region’s second largest cement maker after Swiss Holcim Ltd.

Net profit in the second quarter rose 132% to the highest in 13 quarters, boosted by strong earnings in its core cement, paper and chemical businesses.

Siam Cement, 30% owned by the Thai royal family’s investment arm, the Crown Property Bureau, has invested 92 billion baht (US$2.9bil) since 2011, mostly on acquisitions as it seeks to expand in South-East Asia.

The company’s shares, valued at US$17bil, have risen 42% in the past 12 months, outperforming a 23% gain in the broad index.

After the earnings announcement, the stock rose 1.8%, outperforming a 1.8% decline in the broader Thai market. — Reuters