Kiatnakin Phatra Securities (KKPS) attributed the subdued third-quarter performance of The Siam Cement Public Company Limited (SET: SCC) in 2025 to persistently weak chemical margins and a traditionally low seasonal dividend.
SCC registered a net loss of THB 669 million for the period. However, upon adjusting for inventory losses and net realizable value (NRV) charges totaling THB 1,348 million, as well as an additional restructuring expense of THB 95 million, core net profit after tax improved to THB 774 million—down significantly from THB 3.1 billion in the previous year, according to the KKPS report.
Dividend income provided some relief, as SCC recognized an extraordinary payout of THB 4.89 billion from Kubota (Thailand), where it holds a 40% stake. The company typically records notable dividend contributions in the second and fourth quarters annually.
SCC’s chemical segment remained a significant drag; the unit posted an overall loss of THB 4 billion for the quarter. Excluding the inventory write-down, the core loss stood at THB 2.65 billion. Long Son Petrochemicals (LSP), which commenced operations on 20 August, recorded a core loss of THB 3 billion and a reported deficit of THB 3.8 billion after factoring in an NRV impact of THB 750 million. On average, LSP has incurred quarterly core losses of THB 3.1 billion since the fourth quarter of 2024.
The Thai chemical operations, consisting of ROC and MOC, generated core net profit after tax of THB 390 million, versus THB 758 million a quarter earlier, as chemical spreads diminished. Yet, the segment remained in positive territory due to its more extensive value chain and a higher proportion of high-value-added products. Nonetheless, a stock loss of THB 598 million resulted in a reported loss of THB 208 million.
In terms of production, the Thai unit sold 423,000 tons of PE and PP products, down 4% quarter-on-quarter, while LSP shipped 76,000 tons for the first time.
Contrastingly, SCC’s cement business produced a net profit of THB 1.58 billion during the quarter, marginally lower than the previous quarter’s result, despite seasonal headwinds. Domestic gray cement volumes retreated by 1% year-on-year, led by declines in both commercial and residential sectors. However, Vietnam registered a robust 10% year-on-year increase in gray cement volumes for the quarter.
SCC implemented net price increases of THB 50 per ton sequentially throughout the first three quarters, which, together with efforts to curb energy costs, softened the impact of slower sales; quarterly cement EBITDA dipped only 1% as sales fell by 2%.
Offering a cautious business outlook, SCC highlighted the impending addition of 3.5 million tons of new ethylene/propylene supply, similar to the increase seen in the third quarter. Although oil prices have softened, naphtha prices remain elevated, reportedly due to disruptions in Russian supply.
Polypropylene (PP) is expected to face particular pressure because of expanding Chinese PDH capacity, which benefits from cheap propane imports—citing continued Saudi dumping. SCC projects that margin pressures on PP should persist into the first quarter of 2026, when propane prices are expected to normalize.
While KKPS commended SCC’s deleveraging and portfolio restructuring progress, the ongoing weak polyolefin spread outlook through to 2027 underpins the brokerage’s continued “Underperform” rating.
