SET-listed Siam Cement Group (SCG), Thailand's largest cement maker and industrial conglomerate, is optimistic that 2018 revenue will rise by 5-10%, as expected earlier.
SCG posted 482.45 billion baht in revenue in 2017, of which 450.92 billion was sales revenue, up 6% from a year before.
But net profit in 2017 fell by 2% to 55 billion baht as SCG faced aggressive competition in the cement materials market for construction.
Wednesday, SCG reported that sales revenue in the first half increased by 6% year-on-year to 238.7 billion baht, largely because of higher chemicals prices.
Net profit from January to June fell by 19% to 24.81 billion baht, owing to non-recurring gains on sales of investments in the previous year, the appreciation of the baht and higher naphtha costs.
Additionally, export revenue for the first half stood at 65 billion baht, representing 27% of SCG's consolidated revenue, which remained unchanged, compared with the same period of last year.
Roongrote Rangsiyopash, president and chief executive, said SCG expects this half will be similar to the last as the domestic and overseas markets both continue growing.
"SCG's revenue from the domestic market in the first six months rose slightly by 3%," he said, adding SCG expects domestic sales revenue this half will grow by more than 3%.
SCG forecasts Thailand's cement market in 2018 will grow by 3% to 37 million tonnes -- similar to last year.
Domestic cement volume rose by only 1% in the first half, well below the forecast, as acceleration of large government and private sector infrastructure projects were not forthcoming.
SCG is revising its full-year cement volume projection for Thailand as domestic demand is expanding slowing.
"In Asean, sales revenue was 57.04 billion baht during January to June, up by 10%. Furthermore, 18% of total revenue came from sales and 43.02 billion baht came from other regions," said Mr Roongrote.
SCG forecast the overseas market will grow at the same clip this half as it did in the last.
He said the company is moving to invest more in the Asean market, covering three core business units -- chemicals, cement-building materials and packaging.
The company has primarily invested in mergers and acquisitions (M&As).
Nonetheless, Chaovalit Ekabut, vice president for finance and investment, said SCG has prepared an investment budget of 40-50 billion baht in 2018, covering both domestic and overseas operations, as well as M&A deals.
In the first half, the company spent 18 billion baht on investment.
SCG plans to invest US$5.4 billion (180 billion baht) in the Vietnam-based Long Son refinery petrochemical complex (LSP).
"We will spend 20 billion baht on an initial investment in LSP in 2019," said Mr Chaovalit.
In June, SCG increased its stake from 71% to 100% in the project, and is scheduled to sign a $3.2-billion-dollar loan package with domestic and international financial institutions in August.
The LSP project is set to proceed with the engineering, procurement and construction phase this quarter and begin commercial operations by the first quarter of 2023.
For Thailand, SCG increased its production capacity in its Map Ta Phut Olefins plant from 1.7 million to 2.05 million tonnes per year. This provides raw material flexibility and allows the use of low-priced propane to meet customers' demand and heighten competitive capabilities, he said.
The company plans to spend 15 billion baht on expanding that facility, with work expected to be completed by 2020.
SCC shares closed Wednesday on the Stock Exchange of Thailand at 446 baht, up 10 baht, in trade worth 2.08 billion baht.
