* Q4 net profit 8.2 bln baht vs forecast 6.6 bln baht
* 2014 sales seen up 10 pct, ASEAN market seen up 14-15 pct
* Focus on ASEAN expansion despite political unrest at home
(Adds PTTEP earnings paragraph 12)
By Khettiya Jittapong
BANGKOK, Jan 30 Thailand's biggest cement
producer, Siam Cement PCL, expects a surge in demand
for petrochemicals in Asia to save it this year from the fallout
of a domestic political crisis that has crimped demand for its
Siam Cement is Southeast Asia's biggest producer of
downstream chemicals for plastics and the region's
second-largest cement producer. It forecast growth in cement
demand this year to fall below the 7 percent logged in 2013 but
petrochemicals demand is seen rising to drive overall growth.
"The outlook of petrochemicals will be good this year as
demand has improved in line with the global economic recovery,"
Chief Executive Kan Trakulhoon said on Thursday, without
specifying a figure.
"The weak baht will be positive for our petrochemicals
exports, but we may be affected by rising fuel costs," he told
an earnings briefing.
The company is a net exporter of chemicals, cement and paper
products and is expected to report a 13 percent increase in net
profit to 38.6 billion Thai baht ($1.17 billion) in 2014,
according to Thomson Reuters I/B/E/S which gathers data from
Bangkok has been gripped by anti-government protests since
November which have weakened the baht currency to near
four-year-lows against the U.S. dollar and hurt tourism as well
as domestic demand. The central bank last week cut its forecast
for economic growth this year to about 3 percent from an earlier
projection of 4 percent.
The petrochemicals unit accounts for about 27 percent of
Siam Cement's earnings, and robust demand from Asia for
plastics, used in everything from car making to consumer goods
to construction, has helped boost margins for producers.
An almost 200 percent year-on-year gain in the unit's
earnings before interest, taxes, depreciation and amortisation
(EBITDA) helped the company post a forecast-beating 19 percent
year-on-year rise in net profits for the fourth quarter and a 56
percent increase in its 2013 profit.
UNREST WEIGHS ON OUTLOOK
The company's core cement business saw EBITDA increase 27
percent year-on-year. Kan said cement demand grew only 2 percent
since the beginning of this year, versus a 6 percent growth in
the fourth quarter of 2013.
"If the political crisis is prolonged, it's likely that
cement demand from public investments will be negative. This
should drag down the overall growth," he added. The company was
hit by a foreign exchange loss of 600 million baht in 2013 due
Domestic cement demand is expected to decelerate at 3-4
percent in 2014 after construction activities were put on hold
and the government delayed infrastructure spending as protests
aimed at toppling Prime Minister Yingluck Shinawatra escalate.
A decline in domestic demand for energy as a result of the
protests is also clouding the outlook for PTT Exploration and
Production Pcl, Thailand's biggest oil and gas
exploration firm, analysts say. The company reported a
steeper-than-expected 47 percent drop in its fourth-quarter net
profit on Thursday, largely due to the weaker baht and higher
To help offset the effect of the unrest, Siam Cement's CEO
Kan said his company was committed to expanding in Southeast
Asia this year, where he forecast sales for petrochemicals,
cement and building materials to grow by between 14 and 15
Siam Cement's 8.2 billion baht net profit for the
October-December quarter is 16 percent lower than the previous
quarter due to seasonal weakness in cement and building material
sectors, the company said.
Siam Cement is 30 percent owned by the Thai royal family's
Crown Property Bureau investment arm. It competes with Swiss
Its shares, valued at $16 billion, have fallen 7.4 percent
over the past three months, versus a 12 percent drop on the
broad index. The stock erased earlier loss and was
unchanged at 402 baht at 0855 GMT.
($1 = 32.8900 Thai baht)
(Additional reporting by Pisit Changplayngam in BANGKOK and
Seng Li Peng in SINGAPORE; Editing by Miral Fahmy)