SCG announces FY2022 operating results

by PV03 February 2023 Last updated at 17:52 PM

Long Son Petrochemicals Company Limited (LSP)
Long Son Petrochemicals Company Limited (LSP)

VTV.vn - SCG announced operating results for FY2022 that demonstrated increased sales revenues with decreased profitability caused by dramatically increasing energy costs, inflation, China's economic slowdown, and a petrochemical trough.

In response, SCG accelerates the expansion of new businesses and prioritizes green products to fulfill the demands of megatrends to seize opportunities during economic recovery and sustain growth. Its renewable energy business rose by 78%, green polymer sales exceeding 140,000 tons and expanding by 5 times, with energy-saving solutions being positively received by the market with 40% growth, and fostering innovation for sustainable packaging. LSP has recently been prepared to begin production to market in mid-2023. SCG ensures solid finances by tightly maintaining liquidity, cutting costs, and investing prudently in accordance with the strategy.

Roongrote Rangsiyopash, President and CEO of SCG, said, "SCG's operating results for FY2022 revenue was 383.3 Trillion VND (US$ 16.2 Billion), an increase of 7%. Profit for the Year was 14.3 Trillion VND (US$ 610 Million), down 55% due to the economic slowdown, petrochemical trough, and rising energy costs. Meanwhile, in Q4/2022 Profit for the Period stood at 108 Billion VND (US$ 4 Million). All of these are the result of multiple crises stemming from the Russia-Ukraine conflict, rapidly soaring coal and electricity prices, inflation, THB fluctuation, China's economic slowdown, and the largest petrochemical trough in 20 years. SCG, on the other hand, has closely monitored the situation and quickly adjusted to lessen its impact on the company as a whole by putting an emphasis on maintaining financial stability, cutting costs by utilizing renewable energy sources and digital technology in the production, and prudently strategizing its investment decisions. The result was a healthy cash balance of 63.3 Trillion VND (US$ 2.7 Billion). In the meantime, recent challenges have also generated new business opportunities, particularly the demand for green products, which are a major global trend and are constantly growing, such as renewable energy, green polymer, energy-saving solutions, and sustainable packaging. In 2022, SCG Green Choice sales went up by 34% or represented 51% of total sales, exceeding the growth target. All SCG business units are ready to step forward to strengthen their businesses.

As the tourism and consumption sectors rebound in 2023, the Thai economy is expected to recover. At the same time, ASEAN markets improve with China's reopening. After winter, coal prices are expected to decline. Inflation began to signal a slowdown. SCG believes that we will be able to overcome this crisis and adequately address new needs."

Thammasak Sethaudom, Executive Vice President of SCG, said, "Due to the crisis brought on by the drastically rising cost of coal and electricity, SCG has tapped into the renewable energy sector with a capacity of 234 megawatts in 2022, an increase of 78% y-o-y, with a smart grid network for industrial estates and industrial plant networks, hotels, and hospitals. Such the project has recently been installed at the Saha-Union Group in Bangpakong, connecting renewable energy between 10 companies, cutting energy expenses by 30% and reducing greenhouse gas emissions by 3,670 tons of carbon dioxide annually. This business leverages SCG's renewable energy expertise to mitigate the impact of growing energy costs caused by worldwide market fluctuations in energy prices. In 2022, SCG boosted its proportion of alternative fuels from 26% to 34% y-o-y and its solar energy capacity from 130 megawatts to 194 megawatts y-o-y. In the meantime, SCG exceeded its target by reducing greenhouse gas emissions by 3 million tons of carbon dioxide. Additionally, it is developing carbon capture and utilization (CCU) technology for cement production in Thailand and ASEAN to attain Net Zero 2050 in partnership with Nippon Steel Engineering and Thai Nippon Steel Engineering & Construction."

Mr. Roongrote Rangsiyopash, President and CEO of SCG (Right) and Thammasak Sethaudom, Executive Vice President of SCG (Left)
Mr. Roongrote Rangsiyopash, President and CEO of SCG (Right) and Thammasak Sethaudom, Executive Vice President of SCG (Left)

Tanawong Areeratchakul, CEO and President of SCG Chemicals or SCGC, said, "SCGC continues to develop its innovative green polymer, SCGC GREEN POLYMERTM, which has been well embraced by the global market, as indicated by the 5-fold increase in sales of 140,000 tons over the past year. In addition, it has expanded into a fully integrated plastic recycling business by acquiring Kras/ Recycling Holding Volendam B.V. the Netherlands' leading waste management company. The acquisition will expand the business's capability in the storage, sorting, and manufacturing of Post-Consumer Recycled Resin (PCR) for the household and industrial sectors. SCGC GREEN POLYMERTM have been certified to international standards by a number of leading global organisations, including EuCertPlast from Europe, which verifies that raw material sources for the production of PCR are actually from plastic waste, thereby reducing waste problems; and Recyclass for the development of film coating that improves recycling efficiency for plastic packaging, making SCGC the first in ASEAN to receive this certification. Simultaneously, Long Son Petrochemicals Company Limited (LSP), an integrated petrochemical complex in Vietnam, has progressed by more than 98% and is set to enter the market in the middle of this year."

Nithi Patarachoke, President of Cement-Building Materials Business of SCG, said, “SCG is accelerating its smart living business, particularly energy-saving solutions, which are in high demand on the market in light of the rising cost of electricity. More than 40% growth was observed in 2022. Examples include the SCG Air Scrubber, a global energy-saving innovation for large buildings, convention centers, and shopping malls. The system is highly efficient with energy savings capability of 20-30%. It has been installed in seven large buildings, including the Terminal 21 Pattaya Branch and the Kloud by Kbank Siam Square. As a result of the project's positive reception, further investment projects will be implemented to expand the product line to suit a wider range of customer needs. In addition, SCG Built-in Solar Tile, an innovative solar panel has been introduced for modern dwellings with design to fit flat with the roof and lower electricity costs by 60%.”

Wichan Jitpukdee, Chief Executive Officer of SCG Packaging Public Company Limited or SCGP, said, “SCGP devises innovation development strategies, adds packaging solutions, and establishes an investment budget and research and development expenditures totaling 574 Billion VND (US$ 24 Million) for 2023 by developing innovative Nanocellulose fibers made from agricultural waste used as raw materials in the production of packaging paper and foodservice packaging. It is also ready to expand into the health and composite industries, as well as developing its tissue culture expertise into growing high-value crops and herbs. In addition, it intends to transform waste materials from the production process into renewable energy. The company is in the process of developing Torrefaction Technology to increase the efficiency of Biomass utilization and decrease greenhouse gas emissions, further boosting its ESG operations.”

Roongrote Rangsiyopash, President and CEO of SCG, disclosed, “The Company's unaudited Operating Results for FY2022 registered the Revenue from Sales of 383.3 Trillion VND (US$ 16.3 Billion), an increase of 7% y-o-y, due to Packaging and Cement – Building Materials businesses. Profit for the Year amounted to 14.3 Trillion VND (US$ 610 Million), a drop of 55% y-o-y, primarily because of lower chemical's spreads, higher energy costs and a decrease in the share of profits from associates.”

Revenue from Sales totaled 84.3 Trillion VND (US$ 3.4 Billion), in Q4/22, a fall of 14% q-o-q primarily due to lower prices and sales volume for chemical products as market demand declined. Profit for the Period stood at 108 Billion VND (US$ 4 Million), down 94% q-o-q because of lower chemicals spreads as well as higher coal and electricity cost.

SCG's Revenue from Sales of High Value-Added Products & Services (HVA) in 2022 was 130.5 Trillion VND (US$ 5.6 Billion), or 34% of total Revenue from Sales. Additionally, New Products Development (NPD) and Service Solutions accounted for 17% and 6% of total Revenue from Sales, respectively.

SCG's Revenue from operations outside of Thailand, including export sales from Thailand, registered 172.1 Trillion VND (US$ 7.4 Billion), in FY2022, or 45% of total Revenue from Sales, similar to the same period last year.

SCG in ASEAN (ex-Thailand)

For SCG’s operation in ASEAN (ex-Thailand), the Revenue from Sales in Q4/2022 recorded a 15% decrease y-o-y, amounting to 16.3 Trillion VND (US$ 651 Million), and 19% 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 31 December 2022, the total assets of SCG amounted to 619.2 Trillion VND (US$ 26.2 Billion), while the total assets of SCG in ASEAN (ex-Thailand) were 277.6 Trillion VND (US$ 11.8 Billion), 45% of SCG’s total consolidated assets.

The company reported Q4/2022 Revenue from Sales at 9.2 Trillion VND (US$ 367 Million), a 8% decrease y-o-y mainly from lower sales in Packaging business (VKPC & Batico) as well as lower export sales to Vietnam.

In line with the ESG strategy, SCG in Vietnam continuously organized the flagship SCG Sharing the Dream scholarship under the “Sustainable future starts from your dreams” theme. In its 15th year in 2023, the program grants a VND 1.5 billion scholarship to 100 tertiary students nationwide alongside support for ESG mindsets training.

In the area of community well-being, SCG joined hands with Ba Ria - Vung Tau Eye Hospital and Ba Ria - Vung Tau Youth Union to hold the Sharing a Brighter Vision program, providing 600 free cataract examinations for residents, 100 cataract surgeries, and delivered optical healthcare training. This initiative seeks to improve the eye health of local people, prevent avoidable illnesses that may cause irreversible eyesight impairment, and thus contribute to their overall well-being.

For the updates on the Long Son Petrochemicals (LSP) project, the main machines in the complex, the specialized tank terminal and the central utilities plant, have begun operations to prepare for olefins and polyolefins productions.

Recently, SCG in Vietnam launched the new SCG Elite series in an attempt to bring a total solution to every Vietnamese roof. With the most advanced technology, the double coating helps to increase color durability for shiny, beautiful roofs that better prevent heat and leakage.

SCG unwaveringly progresses toward ESG goals as Vina Kraft Co. Ltd. (VKPC) and SCG Concrete Roof (Vietnam) Co. Ltd. (CRVC) are listed as Vietnam’s top 100 sustainable businesses (CSI 100) assessed by VCCI. This is the fourth consecutive year for CRVC while VKPC is the only enterprise to maintain the gender equality criterion for two consecutive years.

Roongrote concluded, "This year, SCG continues to prioritize maintaining financial stability and liquidity with prudent strategic investments, tightening the purse strings, and reducing energy costs. Simultaneously, it will accelerate business progress to satisfy new needs, invest in innovations, seize economic recovery opportunities, develop solutions to support global megatrends, and strengthen the business. The regional market has begun to recover and is projected to expand further. Furthermore, SCG is prepared to assist in the strengthening of society. It created jobs for 9,000 individuals impacted by the economic crisis in 2022 to provide them with income and lessen social inequality."


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