SET-listed Siam Cement Group (SCG), Thailand's largest cement maker and industrial conglomerate, saw its profits plunge by 41% year-on-year to 18.7 billion baht in the first half of 2022, mainly due to the impact of the Russian invasion of Ukraine.
The war has led to a global oil price surge and higher raw material prices, especially in SCG's chemicals business, while the company has also seen lower equity income, said Roongrote Rangsiyopash, SCG president and chief executive.
"The global economy in the second half of this year remains highly uncertain. It is a crucial time for businesses," he said.
Thailand is also struggling to deal with soaring inflation, driven by the global oil price hike.
Despite a fall in profits, SCG saw its revenue increase by 19% year-on-year to around 305 billion baht from January to June.
In the second quarter alone, its earnings increased by 14% year-on-year to 152.5 billion baht, mainly due to higher sales across all businesses and higher product prices in line with market rates.
In the light of current economic conditions, SCG lowered its 2022 investment budget to 70 billion baht, down from an earlier figure of 80 billion baht.
"The company will focus on merger and acquisition plans or investment projects that promise quick returns for the company," said Mr Roongrote.
For the first six months of this year, SCG spent 22.4 billion baht from its investment budget, with 58% of the money going to the chemical business, 23% for the cement and building material business, 14% to support the packaging business, and the remaining 5% for other purposes.
Most of the budget was spent on the development of the Long Son Petrochemicals (LSP) complex project in Vietnam.
"LSP is expected to start commercial operations in the first half of 2023," said Mr Roongrote, adding that its construction is now more than 90% complete.
SCG believes LSP will play a key role in driving up revenue growth for SCG Chemicals, the petrochemical arm of SCG.
LSP is the company's largest investment project in Vietnam and Asean.
SCG is closely monitoring global economic conditions while adopting key business plans to strengthen the company, including reducing costs, developing more value-added products and services, and using more alternative energy.
