SCG reports steady growth for Q2/2021 and H1/2021 operating results

by 04 August 2021 Last updated at 20:47 PM

For circular economy solutions, SCG has started the production of post-consumer recycled resins utilizing used plastics from community waste.
For circular economy solutions, SCG has started the production of post-consumer recycled resins utilizing used plastics from community waste.

VTV.vn - SCG's profit rose by 15% in Q2/2021 compared to the previous quarter due to higher sales volumes, global economic recovery which drove up chemical product prices, and efficient product distribution at home and abroad.

SCG has introduced "Bubble & Seal" measures to combat the Delta variant of COVID-19, maintained strict safety measures for employees and production facilities, and prepared hospital accommodations and home isolation guidelines for employees to mitigate the burden on public health. SCG aims to achieve long-term growth by adapting to market changes using digital technologies and online platforms, capture home renovation trends, develop innovative high-quality recycled plastic resins, enter into the circular economy business, and expand the packaging business.

Mr. Roongrote Rangsiyopash, President and CEO of SCG, discloses that "The Company's unreviewed Operating Results for Q2/2021 registered Revenue from Sales of 95,396 Billion VND (US$ 4,259 Million), an increase of 39% y-o-y, mainly from higher chemicals selling prices in-line with the higher in oil price and an increase of 9% q-o-q due to contribution from all businesses, capacity addition, particularly Chemicals business which recorded higher product prices as well as sustainably high polyolefin sales volume despite freight tightness situation. The Profit for the Period reached 12,240 Billion VND (US$ 546 Million), an increase of 84% y-o-y, largely attributable to improved Chemicals product spreads and equity income. And it reported a 15%q-o-q increase in earnings, attributed to higher chemicals spreads.

Mr. Roongrote Rangsiyopash, President and CEO of SCG, at the Operating Result of Q2/2021.

Mr. Roongrote Rangsiyopash, President and CEO of SCG, at the Operating Result of Q2/2021.

SCG's Revenue from Sales for the first half of 2021 rose 27% y-o-y to 191,190 Billion VND (US$ 8,297 Million). These were mainly attributable to the higher Chemicals selling prices. Profit for the Period increased 99% y-o-y to 24,654 Billion VND (US$ 1,040 Million) on the back of improved chemicals product spreads and equity income.

SCG's Revenue from Sales of High Value Added Products & Services (HVA) for H1/2021 reached 66,816 Billion VND (US$ 2,819 Million) or 34% of total Revenue from Sales. New Products Development (NPD) and Service Solution such as Solar Energy Solution, Smart and Functional Solution, made up 15% and 5% of total Revenue from Sales respectively.

SCG's Revenue from operations outside of Thailand together with export sales from Thailand for H1/2021 registered 80,194 Billion VND (US$ 3,644 Million). This constituted 44% of total Revenue from Sales, an increase of 30% y-o-y.

SCG in ASEAN (ex-Thailand)

For SCG’s operation in ASEAN (ex-Thailand), the Revenue from Sales in Q2/2021 recorded a 48% increase y-o-y, amounting to US$ 1,125 million, and 26% of SCG’s total Revenue from Sales. This includes sales from both local operations in each ASEAN market and imports from the Thai operations.

As of 30 Jun 2021, the total assets of SCG amounted to US$ 25,337 million, while the total assets of SCG in ASEAN (ex-Thailand) were US$ 9,902 million, 39% of SCG’s total consolidated assets.

In Q2/2021, SCG’s total asset in Vietnam was 122,010 billion VND (US$ 5,303 million), an increase of 37% y-o-y mainly from the Chemicals Business (LSP). The company reported Q2/2021 Revenue from Sales at 9,857 billion VND (US$ 428 Million), a 41% increase y-o-y mainly from new partnership of packaging (SOVI, GOPAK), chemicals (TPC, Chemtech), and export sales from Thailand to Vietnam.

Amid the pandemic, SCG in Vietnam actively contributes to the National Vaccination Fund while its subsidiaries proactively support nationwide pandemic curbing attempts. In southern provinces, SCGP donates 2,000 paper field hospital beds to alleviate frontliners’ pressure to Ho Chi Minh City, Dong Nai, Binh Duong, and Long An with Long Son Petrochemicals initially contributing 10 billion VND for vaccination purposes. In the central region, Song Gianh Cement supports the vaccination program in Quang Binh. Meanwhile, in the northern areas, PRIME persistently supports Vinh Phuc and SCGP accompanies Hai Duong and Bac Giang during the COVID-19 crisis.

Moreover, a subsidiary of SCG in Cement-Building materials, PRIME won the National Quality Award, reflecting distinct management and relentless commitment to excellent product quality for better living.

Roongrote added, "The global COVID-19 situation is highly uncertain, particularly in ASEAN, where the Delta variant has caused a surge in infections. Many countries have reinstated stringent measures aimed at curbing the viral spread. SCG has accordingly stepped up its measures to maintain business continuity. Examples include moving from the "Egg Yolk, Egg White" measure, which isolates employees on the production line from contact with general employees, to the "Bubble & Seal" measure in plants at home and abroad. “Bubble & Seal” involves regularly and proactively doing Covid-19 screening, sealing off a risky area, and providing accommodation within the plant. In addition to providing hospital to infected employees to ensure quick and safe treatment, SCG also gives affected personnel guidelines and suggestions for effective home isolation to curb the transmission of COVID-19. Additionally, SCG has adapted its business strategies to drive sales to markets less impacted by Covid-19 pandemic as well as increase its reliance on e-commerce.

Meanwhile, packaging business has expanded the business through merger and partnership (M&P) and fostered collaborations in the use of High Quality Post-Consumer Recycled Resin (PCR) by converting household post-use plastic packaging bottles into new packaging bottles for the first time in Thailand, accelerating SCG’s entry into high-growth circular economy trend. SCG has also made an entry into automation business to provide customers with automation solutions to help boost productivity and propel the Thai industry into Smart Factory 4.0. These measures enabled SCG's operating performance in Q2 and H1/2021 to improve despite the ongoing regional economic slump.

Moreover, the Board of Directors of SCC has approved SCG Chemicals Company Limited (or “SCG Chemicals”), a wholly owned subsidiary of SCC, to subscribe to the equity rights issuance of PT. Chandra Asri Petrochemical Tbk (or “CAP”) in Indonesia for 434 million USD (or approximately 14,260 million Baht) to maintain a 30.57% stake in CAP, which will be used to develop the second petrochemical complex, CAP2. We view CAP as a strategic investment in expanding chemicals business in Indonesia which has the largest and high-growth chemicals market in ASEAN.


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