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January 29, 2009

Thailand’s Siam Cement posts first quarterly loss since 2000
Siam Cement Plc, Thailand's biggest industrial conglomerate, posted its first quarterly loss since 2000 and halved its dividend, hit by a slump in petrochemical prices.

Its 2009 outlook was bleak, with a global economic slowdown sapping demand and further denting petrochemical prices just as new capacity comes on stream, reported Reuters.

SCC, which earns up to half its profits from petrochemicals, forecast a 10 percent drop in 2009 sales due to falling prices, and said a planned cement plant in Indonesia had been put on hold.

The company's president, Kan Trakulhoon, said spending on existing projects would be cut to 35-40 billion baht ($1-$1.15 billion) in 2009 from 42 billion baht last year.

He said that ensuring the group's liquidity was a key goal for 2009, noting the company had tightened its investments well ahead of the global crisis.

"We've postponed new projects which will take a longer time to produce returns, such as the cement project in Indonesia," he said.

The company, which also has interests in paper and building materials, reported an October-December net loss of 3.5 billion baht ($100 million), against a year-earlier net profit of 5.8 billion baht.

It was the first quarterly net loss since the fourth quarter of 2000, and worse than a 2.5 billion baht loss forecast by 7 analysts in a Reuters survey.

The fourth quarter included a 5 billion baht one-time inventory write-down, mainly from its petrochemical division.

SCC shares fell nearly 2 percent on Wednesday but, by 0850 GMT, the stock was trading unchanged at 105 baht.

SCC posted a full-year consolidated net profit of 16.8 billion baht, down 45 percent from 2007, missing market forecasts for a 17.8 billion baht profit. Annual consolidated net sales rose 10 percent to 293 billion baht.

Net profit from petrochemicals plunged 64 percent in the December quarter, while the contribution from paper slid 30 percent.

SCC acknowledged the squeeze on cement demand last October when it announced plans to delay plant expansions and overseas investments. At the time, it expected domestic cement consumption to drop 10 percent in 2009.

Net sales for the fourth quarter fell 21 percent to 55 billion baht due to a rapid decrease in demand for its products and a slump in global commodity prices, mostly in the petrochemicals business, it said.

SCC shares fell by almost a fifth in the fourth quarter, but still outperformed a 25 percent drop on the main Thai stock index's .SETI during the same period.

The company said it would pay a final dividend of 2 baht per share on April 22, bringing the full-year payout to 7.50 baht. It paid a dividend of 15 baht per share in 2007.

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