SCG reports P5.856B H1 net profit, focuses on navigating economic challenges

SCG recently announced its operating results for Q2/2024, reporting a surge in its second-quarter profit, buoyed by economic upturns in Vietnam and Indonesia. 

The company is implementing strategies to counter domestic economic headwinds and global uncertainties, including cost-cutting measures, AI integration, and a push into low-carbon cement.

Thammasak Sethaudom, SCG President and CEO, revealed that total revenue for Q2 reached P202.456 billion ($3.542 billion), a 3% quarter-on-quarter increase. 

Net profit surged by %53 to P5.856 billion ($102 million) during the same period.

For the first half of the year, SCG generated a total revenue of P398.707 billion ($6.976 billion), nearly matching the previous year's figures. 

The company's revenue streams were diversified across its business units, with SCG Chemicals contributing the most significant portion at 39%.

Despite facing headwinds such as the petrochemical downturn, intense competition, and a sluggish domestic economy, SCG has managed to sustain its growth trajectory through a series of strategic initiatives.

To mitigate rising energy costs, the company has boosted alternative fuel use in its cement operations, achieving a 47% utilization rate in Thailand. SCG also focuses on high-growth segments like solar energy solutions and has invested in technology to optimize its supply chain and distribution network.

Furthermore, the company has leveraged artificial intelligence to enhance operational efficiency by tailoring its product offerings to meet customer needs, such as CPAC’s compact concrete mixer trucks designed for urban construction.

SCG had robust sales in the first half of 2024, with new products and green initiatives contributing significantly to its overall performance. High-value-added products and services accounted for 39% of total sales, while environmentally friendly products under the SCG Green Choice brand made up 54%. The company also saw strong growth in its overseas operations, with 44% of total revenue generated outside Thailand.

By the second quarter, SCG had a strong financial performance, driven by robust economic recovery in Vietnam and Indonesia. However, the company cautioned that the overall economic landscape remains challenging, particularly in Thailand, where recovery has been slower.

To navigate these conditions, SCG has built up a substantial cash reserve of P124 million and focuses on innovative solutions to meet customer needs. The company is also capitalizing on infrastructure development in Indonesia and Vietnam, where government spending is on the rise.

SCG is ramping up its global presence and product offerings. The company is aggressively promoting its Low Carbon Cement, with exports to the US surpassing 1 million tons. Expansion into Vietnam and Australia is underway. In addition to cement, SCG is diversifying its portfolio. Its distribution arm, SCG Distribution and Retail, is expanding its retail footprint in ASEAN, with Mitra10 leading the charge. SCG Smart Living is introducing new landscape materials and HVAC systems.

The company is also making significant strides in the construction materials sector, with a focus on high-value products and expanding into new markets like India. SCG Chemicals is recovering from plant disruptions but faces industry challenges. To mitigate risks, the company is investing in green innovations and plastic recycling. The upcoming Long Son Petrochemicals project is a key growth driver.

SCG Packaging is expanding its capacity to meet rising demand, especially in tourism and services. The company is also venturing into medical supplies and labware. SCG Cleanergy is focusing on solar energy solutions and energy storage.

Despite economic challenges, SCG’s ASEAN operations have shown strong growth, driven by the recovery in Vietnam. The company continues to invest in research and development, with a focus on sustainability and innovation.

SCG's commitment to the local market is evident through initiatives like the NATCON-CONEX 2024 exhibition and dealer appreciation programs. The company is poised to capitalize on growth opportunities in the ASEAN region and beyond.