Reuters reported that Siam Cement Pcl's fourth quarter net profit tripled, beating market expectations, thanks to a gain from the sale of a stake in PTT Chemical.

Analysts are positive about its 2011 outlook because of new output from its petrochemical plant, improving product spreads and increased demand in its cement business.

Siam Cement, 30% owned by the royal family's Crown Property Bureau, is Thailand's third largest company by market value. It earns up to half its profit from petrochemicals, the rest coming from paper, cement and other building materials.

Its October to December 2010 quarter net profit came to THB 16.7 billion, well above the year earlier profit of THB 5.33 billion and higher than the THB 14.3 billion forecast by 7 analysts surveyed by Reuters.

The company, a barometer for Thailand's corporate health, made a THB 6.56 billion net profit in the third quarter. In December 2010, Siam Cement sold a 15.59% stake in PTT Chemical, the country's top olefins maker, for THB 33 billion.

Ms Amornrat Cheevavichawalkul analyst at Citi said that "The divestment of PTTCH has led to concerns about SCC's earnings as it was one of the largest equity income contributors. However, we believe that the market still underestimates the earnings contribution from other businesses."

Siam Cement is planning to sell up to THB 15 billion of four year bonds from March 1st 2011 to March 30th 2011.

Mr Kan Trakulhoon CEO of Siam Cement said that it expected 2011 revenue to rise 10% to THB 330 billion and planned to spend THB 100 billion over the next five years, mostly on acquisitions. He added that "Growth drivers this year will be coming from output from our new Map Ta Phut plant, which will be running fully. Domestic cement sales are expected to rise 7% to 8%."

Siam Cement made a full year net profit of THB 37.4 billion, with sales revenue rising 26% to THB 301 billion due to volume growth in most businesses. However, EBITDA decreased 2% to THB 45.9 billion due to lower chemicals margins.

Its petrochemical spread for the quarter stalled, with the spread between its key high density polyethylene and naphtha raw material flat at USD 467 per tonne. It is to pay a dividend of THB 8 a share on April 27th 2011 for its performance in the second half of 2010, taking its total dividend this year to THB 12.5.

(Sourced from www.reuters.com)