Message from the Group Executive Committee

During 2023, volatility continued on the back of still imbalanced supply chains, whilst cost inflation has been slow to abate. Demand slumps for construction materials pressurized toplines and caused imbalances in inventory levels. The cost of borrowing increased significantly as central banks reacted to tame inflation and the effects of liquidity curtailment stifled real estate development in many markets. Reversal of China’s zero-Covid policy failed to bring an uplift in economic activity, much anticipated in the Asian markets, and problems in its real estate sector had deep impacts on the seaborne export and trading markets. Problems in Vietnam’s bond markets caused a retraction of real estate developments which in turned triggered a large demand reduction particularly in the northern and southern markets there.

As a result of this turmoil, consolidated Group revenue softened by 16 percent over the prior year, however internal restructuring and deepened cost reductions led to improved profitability margins. As a result, net profit attributable to equity holders increased in 2023 by 44 percent compared with the previous year.

Cashflow from operating activities increased compared with the prior year as a result of various Management interventions and working capital controls.

The ongoing resilience of our entire staff again underpinned resolute efforts to face these adversities and we have worked on increasing customer and channel partner engagement during challenging market circumstances.

One bright spot was Thailand, where infrastructure investment stayed solid, although retail markets led to pressure on household budgets resulting in suppressed demand for bagged products. Whilst volumes were slightly down on the prior year by 7 percent, the pricing levels stayed buoyant, and inventories were reduced in most segments and as energy inflation abated.

Our business in Vietnam saw strongly reduced sales volumes in the relevant southern Vietnam market with shrank over 40 percent in volume terms relative to the year before. Sri Lanka market demand remained at a low ebb resulting from the stubborn after-effects of the country’s 2022 FX crisis.

As China’s clinker imports ground to a halt, trading activities across the APAC region slumped and FOB prices strongly retracted. Export capacity at our Saraburi plant in Thailand needed to be adapted accordingly.

Our INSEE Ecocycle subsidiaries across the Group, however, saw enhanced profitability as substitution levels of fossil fuels were increased amidst a solid pricing environment. Meanwhile 2023 saw some divisions of our Light Building Materials businesses in Thailand and Indonesia being impacted by the softening in residential construction volumes.

Cambodia saw a drop-off in national demand but our joint venture business there managed a successful increase in market share and good profitability across its business activities. In Bangladesh, our business managed improved performance over the prior year even in the face of some erosion of cement demand.

In spite of yet another tumultuous year in 2023, the Group is confident about the coming year ahead on the back of having executed strong restructuring to raise productivity and to adapt capacity of the prevailing demand levels. Even as energy cost inflation abates, our efficiency efforts have increased to still lower energy intensity in the manufacturing of our product range, and a leaner energy footprint. We expect revenue recovery to ensue as demand levels recover into 2024 amidst our restructured commercial go-to-market approaches.

As always, Siam City Cement stays the course with a focus on the long term and on our sustainability responsibilities. Our Environmental, Social, and Governance (ESG) endeavours have been accelerated with our above-mentioned energy efficiency actions allowing us to substantially raise our 2023 ambitions, thus accelerating us on our path towards Net Zero in 2050. This, alongside our focus on governance and accountable leadership, is keeping us well on track with our sustainability ambitions.

The constant trust and support from our shareholders, our Board of Directors, our customers, our communities, our employees, and our stakeholders is deeply appreciated.

It drives us forward in our absolute commitment to deliver on your expectations.