SET-listed Siam City Cement Plc (SCCC), Thailand's second-biggest cement maker, posted a 27% decline in first-quarter net profit due to weak demand at home.
Chief executive Vorathep Rangchaikul said net profit was 1.39 billion baht in the first quarter, down by 26.8% year-on-year, on net sales of 8.42 billion, down by 2.43%.
As a result, earnings per share in the quarter fell to 6.05 baht from 8.27 baht a year earlier.
Mr Vorathep blamed the profit plunge on the continuous slowdown in private investment and a dearth of large-scale state infrastructure projects.
"Lack of demand has intensified competition, which has put downward pressure on cement selling prices," Mr Vorathep said, adding that the export market should help raise cement sales volume.
SCCC expects the domestic cement market will improve during the rest of the year as the government works to speed budget disbursement, especially on large infrastructure projects that should stimulate the economy.
"Consequently, private investment is also expected to pick up, with better visibility in government direction on infrastructure investment policies," Mr Vorathep said.
Project acceleration will directly raise cement demand.
With weak demand eroding net profit in the first quarter, the company must manage operations more effectively and strive to cut operating costs in order to pare losses.
"The plant operation has been efficient, with high use of assets," Mr Vorathep said.
"Production costs were better than in the prior year, as coal prices continued their declining trend."
Moreover, the company switched its focus to energy-saving initiatives at a time when competition was intensifying.
"Key energy-saving initiatives have continued to be one of the main factors improving production costs," Mr Vorathep said.
"However, selling and distribution costs together with administrative costs led to an increase due mainly to certain structural changes."
SCCC shares closed yesterday on the SET at 365 baht, up three baht, in trade worth 35.3 million baht.