SCG Packaging (SCGP) Q2 2024 earnings summary

Executive summary

• Revenue for H1 2024 reached THB 68,182 million, up 3% year-on-year and 7% from the previous half, driven by higher volumes in integrated packaging and fiber businesses, and increased packaging paper prices.

• EBITDA for H1 2024 was THB 9,786 million, up 7% year-on-year and 14% from H2 2023, with a margin of 14%. Net profit was THB 3,178 million, up 17% year-on-year and 25% from H2 2023.

• Q2 2024 revenue was THB 34,234 million, up 6% year-on-year and 1% quarter-on-quarter; EBITDA was THB 4,635 million, down 10% quarter-on-quarter; net profit was THB 1,453 million, down 16% quarter-on-quarter.

• Revenue growth was supported by improved ASEAN packaging demand, tourism, export recovery, and increased consumer spending, despite higher raw material and freight costs.

• Cost reductions were achieved through supply chain management, full utilization of biomass, and AI-driven process optimization.

Financial highlights

• Integrated packaging business revenue was THB 50.9 billion, up 3% year-on-year and 7% from H2 2023; EBITDA was THB 7.5 billion, up 4% year-on-year.

• Fiber business revenue was THB 13.1 billion, up 5% year-on-year and 7% from H2 2023; EBITDA was THB 2.3 billion, up 20% year-on-year.

• Q2 2024 gross profit margin was 18%, EBITDA margin 14%, and net profit margin 4%.

• Net debt stood at THB 32 billion, with net debt to EBITDA at 1.7x; cash was THB 24 billion, debt THB 56 billion.

• Interim dividend of THB 0.25 per share approved, payable in August 2024.

Outlook and guidance

• Focus on optimizing product portfolio, cost reduction, and supply chain efficiency in H2 2024, with emphasis on Fajar’s turnaround and leveraging synergies.

• Expectation of continued high RCP prices and rising paper and box prices through year-end, with demand recovery anticipated in late Q3.

• Persistent risks include geopolitical tensions, high raw material and freight costs, and volatile energy prices.

• Continued expansion through organic growth and M&A, with one M&A completed and more anticipated.

• Emphasis on ESG and Carbon Footprint of Product certification to strengthen competitive advantage.