SCG Decor Public Company Limited (SCGD) has announced plans to invest around 10 billion baht to support its goal of doubling growth by 2030. The company's first-half performance for 2023 has surpassed market expectations, driven by high-margin HVA sales in Vietnam, along with two completed energy cost reduction projects. By early Q3, SCGD is set to supply over 11 million square meters per year of glazed porcelain tiles and large-sized tiles from its factory in Vietnam to meet market demand.

Mr. Nampol Malichai, CEO and Managing Director of SCG Decor Public Company Limited (SCGD), a leader in the ceramic, surface decoration materials, and sanitary ware business in the ASEAN region, revealed that for Q2 of 2023, the company achieved a profit of 283 million baht, a 10% increase compared to the previous quarter and a 45% increase year-on-year. Sales revenue was 6,566 million baht, down 8% from the same period last year and down 3% from the previous quarter. The primary revenue source came from the ceramic business in both Thailand and Vietnam, with Vietnam seeing a 22% growth in sales from Q1 due to the ability to increase sales of high-value-added (HVA) products, resulting in improved selling prices, partly due to the Vietnamese market showing signs of recovery.

For the first half of the year, the company reported sales revenue of 13,350 million baht, a 7% decrease from the same period last year, but managed to achieve a half-year profit of 541 million baht, a 36% increase, close to expectations. This was due to an increased proportion of high-margin HVA sales, especially in Vietnam, while maintaining stable selling prices for both ceramic tiles and sanitary ware, along with improving production efficiency through various projects. Additionally, two energy cost reduction projects were completed in Q2.

Mr. Nampol stated, "Overall, SCGD has continued to grow in the first half of the year. For the second half, we are confident that we will achieve our profit targets compared to the same period last year, as two Hot Air Generator installation projects in Thailand have been completed. Combined with previously completed projects, this will enable the company to reduce energy costs by 60-70 million baht per year. Importantly, SCGD will also see increased revenue from the SPC LT by COTTO flooring factory, which began production in July, targeting a market share of over 500 million baht. Furthermore, we are enhancing and increasing production capacity for porcelain tiles and large-sized tiles to expand our market in Vietnam by over 11 million square meters per year. The construction projects are progressing well and are expected to be completed and start production within 2024. We anticipate that these projects will help increase revenue with higher profit margins, as SPC LT by COTTO, glazed porcelain tiles, and large-sized tiles all have higher average selling prices than regular products, targeting the mid to upper market segments.

Additionally, SCGD is preparing to expand its distribution channels. In Thailand, it has begun trial operations for the new COTTO LiFE showroom in Don Mueang, covering 2,500 square meters, which will fully open in August. Another COTTO LiFE showroom is under construction in Phuket, covering 1,100 square meters, expected to be completed in January 2025. SCGD has also partnered with local firm LHCG Construction Store to open the first retail store for ceramics and sanitary ware under the name “OK Tile Center” in Poipet, Cambodia, and plans to expand distribution channels to cover southern Vietnam and new areas in each country. Therefore, we are confident that SCGD will achieve its profit targets this year without a doubt.

SCGD maintains strong financial health and long-term growth potential, with total assets valued at approximately 42,072 million baht and total liabilities of 20,046 million baht, resulting in shareholders' equity of 22,026 million baht. The company effectively manages cash flow and has generated stable cash flow from core operations, with an EBITDA of 910 million baht in the first half of 2023.

Moreover, the company has managed its capital and expenditures in line with future growth plans. As of the current quarter, SCGD has approximately 10 billion baht in cash set aside for further investments. The board of directors has also approved an interim dividend payment based on the first half of 2023 operations at a rate of 0.10 baht per share, totaling 165 million baht, with the payment scheduled for August 22, 2023. The XD date is set for August 5, 2023, and the record date for dividend eligibility is August 6, 2023.

Mr. Nampol concluded, "It is clear that SCGD is well-prepared in terms of investment to achieve its goal of doubling growth by 2030, following the main plans, including collaborating with partners both domestically and internationally to expand the sanitary ware business and various surface decoration materials within the Decor Surface Materials group, which is a strategy that will help achieve growth targets rapidly."