SCG posts steady growth in Q2 and H1 2021 operating results
Quick company response to crisis and opportunities from global market spur growth
Higher sales volumes, global economic recovery driving up chemical product prices, and efficient product distribution at home and abroad helped push up SCG profit for Q2 2021 by 15 percent over the previous quarter. SCG 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, capturing home renovation trends, developing innovative high-quality recycled plastic resins, entering the circular economy business, and expanding its packaging business.
Roongrote Rangsiyopash, president and CEO of SCG, discloses that”The company’s unreviewed operating results for Q22021 registered revenue from sales of Php205,185 million (US$4,259million), an increase of 39 percent YoY, mainly from higher chemicals selling prices in line with higher oil prices, and an increase of 9 percent QoQ from contribution from all businesses and capacity addition, particularly in the 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 Pph 26,327 million (US$546million), an increase of 83 percent YoY, largely attributable to improved Chemicals product spreads and equity income. Increase in earnings rose by 15 percent QoQ, attributed to higher chemicals spreads.”
SCG’s revenue from sales for the first half of 2021 rose 27 percent YoY to Php400,095million (US$8,297million) on the back of higher Chemicals selling prices. Profit for the period increased96 percent YoY to Php48,612 million (US$1,040million)from improved chemicals product spreads and equity income.
SCG’s revenue from sales of High-Value Added Products & Services (HVA) for H12021 reached Php135,954million(US$2,819million) or 34 percent of total revenue from sales. New products development (NPD) and service solutions such as Solar Energy Solution and Smart and Functional Solution made up 15 percentand5 percent of total revenue from sales, respectively.
SCG’s revenue from operations outside of Thailand, together with export sales from Thailand for H12021,registeredPhp175,727million (US$ 3,644 Million). This constituted 44 percent of total revenue from sales, an increase of 30 percent YoY.
SCG in ASEAN (ex-Thailand)
For SCG’s operation in ASEAN, excluding Thailand, Q2 2021 revenue from sales recorded a 48 percent increase YoY amounting to US$1,125 million, 26 percent 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 June 30, 2021, SCG’s total assets amounted to US$25,337million while total assets in ASEAN (ex-Thailand) were valued at US$9,902million, 39 percent of SCG’s total consolidated assets.
Based on the Q22021 report, SCG’s total assets in the Philippines amounted toPhp19,901 million (US$ 409million), an increase of 5 percent YoY mainly from the Cement Building Material business. The company reported Q22021 revenue from sales ofPhp4,548million (US$94million),a128 percent increase YoY mainly from operations in Packaging and CBM (Ceramics), and huge export sales from Thailand and regional to the Philippines.
With trends signaling rising economic activities, SCG Marketing Philippines Inc. is grasping the opportunity by embracing a hybrid workplace, scheduling improvements, and exploring new solutions. The company plans to diversify and increase its product portfolio to address the recent upturn in home improvement as spending on home renovations and repairs is expected to stay strong in the coming quarters.
Operations at United Pulp and Paper Co., Inc. (UPPC) remained in full swing in Q22021 but with challenges from rising raw materials costs due to supply chain disruptions. Amid quarantine restrictions, UPPC continues to support manufacturers of essential goods from the F&B, personal care, pharmaceuticals, and other industries to ensure seamless supplies.
Mariwasa, a leading tiles manufacturer and brand in the building industry, marked its 55thanniversaryin June with the “Moving Forward” theme, driven by its commitment as the total home building solutions provider. Mariwasa continues to expand its product line to improve the manufacturing process and further meet growing demand in the industry.
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 spread of the virus.SCG has accordingly stepped up its health and safety protocols to serve all stakeholders and maintain business continuity. These measures 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 hospitalization to infected employees to ensure a quick and safe treatment, SCG gives affected personnel guidelines and suggestions for effective home isolation.
Additionally, SCG has adapted its business strategies to drive sales to markets less impacted by the COVID-19 pandemic as well as increase its reliance on e-commerce. SCG has also expanded into the automation industry to provide customers with automation solutions to help boost productivity and propel the Thai industry into Smart Factory 4.0. These measures boostedSCG’s operating performance in Q2 and H1 2021 despite the regional economic slump.
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