SCG Q3 2022 sales declines 7%

This is a result of the Russia–Ukraine conflict, the global economic slowdown induced by the global rise in interest rates, and China’s economic slowdown resulting from its Zero–Covid Policy.

SCG’s unreviewed Operating Results for Q3/2022 registered the revenue from Sales of 142,391 MB, a drop of 7% q-o-q, due to lower chemical’s product prices driven by softer petrochemical’s demand due to the trough of Chemicals business. This is a result of the Russia–Ukraine conflict, the global economic slowdown induced by the global rise in interest rates, and China’s economic slowdown resulting from its Zero–Covid Policy.

Profit for the Period was at 2,444 MB, a decrease of 75% q-o-q largely attributable to lower chemical’s spreads, higher energy cost, together with lower seasonal dividend. However, on a y-o-y basis, Revenue from Sales has climbed by 8% y-o-y, mostly due to higher product prices in-line with the market of cement and building materials business and SCGP. Profit for the Period declined by 64% y-o-y due to lower chemical’s spreads and lower equity income.

In 9 months of 2022, SCG registered Revenue from Sales of 447,419 MB, a rise of 15% y-o-y. This is owing to higher sales across all businesses mainly from higher product prices in-line with the market. Profit for the Period totaled 21,225 MB, down 45% y-o-y, as a result of higher feedstock and energy costs as well as lower equity income in Chemicals business.

SCG has modified its HVA (High Value Added products and services) strategy by tightening the criteria to increase product competitiveness in the global market. The efforts are to keep up-to-speed in launching products in response to the rapid change in customer’s needs and to increase profitability. Under the new criteria, SCG’s sales of HVA products and services in 9 months of 2022 amounted to 152,888 MB and accounted for 34% of total Revenue from Sales. Furthermore, the proportion of New Products Development (NPD) and Service Solutions accounted for 17% and 6% of total Revenue from Sales, respectively.

In addition, SCG’s Revenue from operations outside of Thailand, including export sales from Thailand in 9 months of 2022 registered 203,134 MB or 45% of total Revenue from Sales, equivalent to the same period last year.

The total assets of SCG, as of September 30, 2022, amounted to 929,931 MB, of which 46%represented assets in ASEAN (excluding Thailand).

Roongrote Rangsiyopash, President and CEO of SCG, disclosed, “SCG’s Q3/2022 operating results were significantly impacted by the energy prices that reached 10–years highs. This was the consequence of the Russia–Ukraine conflict, which has resulted in a significant increase in SCG’s energy costs on top of the deepest petrochemical trough in 20 years. Global economic slowdown is expected as global interest rates rise. This will be exacerbated by China’s economic downturn as a result of its Zero–Covid Policy.

SCG is well–equipped to handle this recurring crisis while maintaining solid financial stability. It has scaled back costs and expenses, reassessed investments, and deferred new non–urgent projects. It focuses on leveraging projects with quick returns that are consistent with business expansion strategies, such as the LSP petrochemical project in Vietnam, whose construction progressed on plan and reached 97% completion.