SCG Packaging (SCGP) Q3 2024 earnings summary

Executive summary

• Nine-month revenue reached THB 101.553 billion, up 4% year-on-year, driven by packaging paper, consumer packaging, and dissolving pulp, but margins were pressured by higher costs and currency appreciation.

• EBITDA for nine months was THB 13.282 billion, down 1% year-on-year, with margin declining from 14% to 13%; net profit was THB 3.756 billion, down 7% year-on-year.

• Third quarter revenue was THB 33.371 billion, up 6% year-on-year but down 3% sequentially; EBITDA for the quarter was THB 3.496 billion, with margin squeezed to 10%.

• Net profit for Q3/2024 fell 56% year-on-year and 60% quarter-on-quarter to THB 578 million, reflecting margin pressure and FX impacts.

• Consumer packaging remained resilient, especially in ASEAN, while export to China declined due to weak demand.

Financial highlights

• Cost of goods sold increased to 84% in Q3/2024 from 82% in Q2/2024, squeezing margins.

• Core profit for nine months was THB 3.8 billion; Q3 net profit was THB 578 million, reflecting margin pressure from higher RCP costs and currency appreciation.

• Net debt increased to THB 55 billion, mainly due to the Fajar acquisition; net debt to EBITDA at 3.1x.

• Free cash flow for 9M/2024 was THB 5,065 million, down from 11,152 million in 9M/2023.

• Gross profit margin for 9M/2024 was 17.8%; EBITDA margin 13.1%; net profit margin 3.7%.

Outlook and guidance

• China demand expected to remain soft through Q4/2024, with high seasonality in October-November.

• ASEAN demand and exports are recovering, with Vietnam and Indonesia expected to outperform.

• Focus on portfolio optimization, especially targeting domestic and Middle East markets, and continued improvement in Fajar operations.

• CapEx for next year set at THB 13 billion, prioritizing value chain integration, growth, and downstream expansion.

• Expectation of global economic soft landing in H1 next year; geopolitical risks and China recovery remain key uncertainties.