July 25, 2018 / 9:52 AM / 22 days ago

Thailand's Siam Cement posts lower quarterly profit, expects stronger H2

* Profit down 6 pct on weak chemical business, cement demand

* Expects 5 to 10 percent revenue growth in 2018, says CEO

* Plans to borrow $3.2 bln for Vietnam petrochemical plant

BANGKOK, July 25 (Reuters) - Thailand’s largest industrial conglomerate Siam Cement Pcl posted a 6 percent drop in second-quarter profit on Wednesday, hurt by lower contribution from its chemical business and weak seasonal cement demand.

Profit came in at 12.4 billion baht ($372.04 million) for the three months ended June, compared with 13.2 billion baht a year earlier and slightly above Thomson Reuters I/B/E/S estimate of 12.2 billion baht.

Siam Cement, which is seen as a barometer of the Thai economy, has struggled to achieve earnings growth since last year.

Revenue rose 11 percent in the quarter and 6 percent in the first half.

Siam Cement expects a full-year revenue growth of 5-10 percent as the economy improves with more government projects, Chief Executive Roongrote Rangsiyopash told reporters, adding that he expected cement demand to grow up to 3 percent.

The central bank raised its growth forecast for the year to 4.4 percent from 4.1 percent in June.

Earnings growth is expected to pick up in the second half due to an improving chemical business and a depreciating baht , analysts said. The baht has declined about 2.5 percent so far this year.

Profit at the chemical business, the largest contributor to the company’s earnings, dropped 10 percent to 8.1 billion baht due to higher crude oil prices and the baht’s appreciation last year.

Revenue from the cement and building materials business increased 5 percent to 44.6 billion baht due to demand from Vietnam, Indonesia and the Philippines but was held back by weak demand in Thailand.

Siam Cement shares were up 1.8 percent in afternoon trading.

BETTING ON OVERSEAS GROWTH

The company plans to borrow $3.2 billion in August for the construction of Vietnam’s largest petrochemical complex, it said in a statement. The construction is expected to begin this quarter with operations to start in the first half of 2023.

In 2019, Siam Cement aims to invest 20 billion baht in the project out of the planned 50 to 60 billion baht capital expenditure, Chief Financial Officer Chaovalit Ekabut said.

$1 = 33.3300 baht Reporting by Chayut Setboonsarng and Wirat Buranakanokthanasan; Editing by Subhranshu Sahu

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