Good morning, ladies and gentlemen. Welcome to the SCG Analyst Conference for the second quarter of 2026. I am Sutathi from SCG, Investor Relations Specialist, and I will be the narrator for today's section. We are pleased to welcome all the guests who joined our session, both online and offline. For those who join online, please kindly change your name and your company, and I will accept you to the meeting room. Today, our management are here to provide you the continued earnings momentum for the second quarter as well, and the business update followed by outlook. After the presentation, we will open the floor for the questions. Today's presenters comprise of SCG management, led by Khun Thammasak, the CEO of SCG, who will walk you through for the consolidated results and outlook. SCGC management, led by Khun Sakchai, the CEO of SCG Chemicals.
Next, Khun Wiroat, President and CEO of SCG Cement-Building Materials, will be also presenting for the SCG Decor. Lastly, Khun Chantanida , CFO of SCG, who will present the financial parts and also SCG Packaging. Now let us start for today's presentation, beginning with Khun Thammasak.
Good morning, and welcome back to analyst conference discussion today. I just want to spend a little bit of time to look back at Q2. What really happened and what did we do right, probably what did we do wrong that we have to adjust. Q2 is very challenging time, as everyone know, because the disruption in the Middle East. You could probably remind everyone that the closure of the Hormuz actually cut 50% of the feedstock to Asia. 50%. At the beginning of the quarter, we really afraid that this is going to be a major disruption. Actually, it did. It is a major disruption. If you remember, we are implementing something called a daily war room. Basically, try to adjust on the day-to-day and week-to-week basis to create our supply chain resiliency. That is something that we have done.
Basically, what we try to do during those time is to procure the feedstock from non-Hormuz. That very obvious Hormuz is close, we have to find another 50% from non-Hormuz. In the meantime, we have to protect our customer, especially customer who really rely on our high value-added. This is a specialty product they cannot easily find from somebody else. If we really cut the supply to this customer, they are going to have a big impact to their operation. That is why we need to support and protect this customer. We have to make several tough decision to shut down the contracts, especially on the chemical. Those are the daily, weekly action that we have done. In a nutshell, chemical, we basically do the portfolio management and supply chain optimization.
But the detail is basically make a decision whether to buy this feedstock or not, whether to run which product, how to protect the customer and our value chain. We are geared toward the high-value added products that also really help us to steer through this very turbulent time. And we deliver the homework almost last minute. The divestment of the stock of the Chandra Asri . Last year we said probably could complete by middle of this year, and things had get turned out to be more difficult. And then at the very last moment we can execute this and deliver the homework of close to THB 25 billion cash into our branch. And on the cement and building material, basically last year we did stop-loss and shut down non-performing operation. Took the write-off, if you remember, that THB 5.3 billion took the write-off last year.
And we analyzed that this year there will be a recurring gains because we don't need to shore up those loss-making. This year we will gain around about THB 1 billion per quarter ongoing. So you could see this is why our cement building material and other business are performing quite okay. Penetration of the low carbon cement really help us. You look at energy price going up, we convert into the low carbon cement using the biomass and renewable energy.
Our energy cost going down. So that's really helpful. And now you start to see that FT increase. So make a lot of sense to use the renewable energy. So we see our energy cost reduce compared to the normalized cost increase due to the index. Packaging, margin actually recover and another homework that packaging team has delivered, [inaudible] already announced in the analyst conference of the SCG Packaging.
Actually, we turn around the Indonesian operation from loss into the profit. So that's another homework that we have done. Packaging still enjoy the robust growth in Thailand and in Vietnam because of the relocation of production into ASEAN. In terms of financial, which is the result of our immediate action, we end up net debt decrease from 5x to 3.7x, which [inaudible] will explain more in detail. And net debt decreased by THB 39 billion, which is another good thing to our balance sheet. We become stronger in term of our balance sheet, and some cash on hand and continue to deliver something that we promised, is deleveraging strategy. So that is the immediate action. A lot of things that we have done on the day to day, week by week. Numerous thing. However, we are not deviate from our two-year goals.
Our two years goal is to transform, to build the competitive asset, right? So the project that haven't create any EBITDA or profit now, but it will create the profit and EBITDA at the end of next year. So that is the ethane. Pisang will explain progress of this. So we already know that if we complete this ethane project earlier is the better, because ethane is very competitive, especially in this type of situation. And it speak to our non-Hormuz diversification of the feedstock. So that's why we are pushing up, Pitang from who stay in Vietnam are pushing up on the ethane project and made a good progress. Our study on the JV with the PTTGC is ongoing. Okay? I cannot say much because we need a joint statement. We cannot say anything by ourselves alone. But anyway, it's moving.
Another effort that we try to create a long-term competitiveness on the cement and building materials, we announce merging three business unit into one. From cement and green construction, smart living, and distribution and retail, we merge into the SCG CBM. Basically, I think the main idea is to create a customer-centric organization, and the cost saving is a by-product. Because in order to serve the customer well, you need to streamline the internal process. You need to create a single phase of contact. You are going to see us moving toward the key account management, key installer management. KIM and KAM is something that we are pushing forward to create a customer-centric organization. To deliver that, we have to streamline the back end, and we will create the cost saving. Okay? That is the promise. P'Boy will explain more.
Packaging, we still moving forward to improve the integration in Indonesia. We have a big paper plant. We have a very small, in the past, very small box plant, and now we acquire MYPAK. We improve the integration. When you improve the integration, you have the integrated margin to withstand the volatility, to withstand the competition, competitive pressure in Indonesia. These are the things that we have done to create a long-term competitiveness. Of course, the packaging is still growing in ASEAN because this business unlike benefit from this relocation to ASEAN. ASEAN optimization, as we said, now we are seeing the big issue on the Middle East, Hormuz, Red Sea, this is a lot of headache for us, but we start to get used to it. We start to learn how to deal with it, right? Another thing is, I call it the gray rhino.
The rhino that is running toward us is the over capacity in Mainland China. This is something coming, and we need to do something about it. We need to improve our competitiveness. That is why we do the ASEAN optimization, consolidate our asset and create the ASEAN scale to be very competitive in the level similar to the Mainland China. That is something we are still ongoing. We know that if we create the ASEAN scale operation, we can implement AI and robotics in a much, much efficient way. Clean energy is still growing. Okay? Not talk too much, but still growing. The project that we energize and move online is steadily. This is another growth area that into the future we will put more emphasis on. This is the result.
I think, adjusted cash EBITDA, which is the benchmark we measure ourselves on the Q2, is THB 27.9 billion, up year-on-year 47%. Half one is almost THB 43 billion and up year-on-year 35%. If you look at the adjusted profit also, you see improvement on the THB 10.8 billion. Okay? For the half one is THB 12.6 billion. Reported profit is THB 17.7 billion, so that is something we already announced. If you break down where the improvement in the EBITDA come from, you could see that almost all. The SCG Chemicals, Pisang, now he is very handsome now. Look good. You see a big improvement, and this is thanks to the Pisang and SCG Chemicals team to timelessly have a meeting at daily war room. He can do that, I think. This is something very surprised.
Once you execute supply chain resilient amidst of those turbulence, you get something good out of it. For the cement and building material, P'Boy still steadily improve the core EBITDA generation. This is the type of provide stability for the whole group, so steadily increase. SCG Decor seem to be slightly lower, but because they took the restructuring as they announced in the past few months that they do the consolidation of the Thai operation and ramp up the capacity in Vietnam. Please be patient if you can, because we already invest, we already do it. SCG Packaging also steadily increased, and they deliver as they promised on the Indonesian operation. In long term, we will create a very competitive envelope, not only in Thailand and Vietnam, but also in Indonesia, which is a very promising market. Cash on hand, THB 76.7 billion.
Of course, we have more cash because we do the asset divestment and we have better EBITDA generation. [inaudible] still control the CapEx. You will see. She still have a very tight control on the CapEx. That result in a lot of cash. Net debt has come down. As I mentioned, net debt on EBITDA has come down. The board recommend to pay THB 3.5 per share. You could see last year we pay interim, which is THB 2.5, right? Now it is THB 3.5. That mean we confident that we are quite okay to take care of every shareholder. Very quick on the revenues. First half to THB 260. There is about 4% year- on-year increase. Mainly from the chemical price, of course, and actually more volume from the packaging, not just the price. Volume from the packaging and the sale growth of the cement.
Actually, cement in Q2 should be the low season, but P'Boy will explain more why he can make more stronger performance. If you look in breakdown sale destination, ASEAN still very important, 27%. If you zoom to Vietnam, Indonesia, it is a largest market for us.
Thailand is 53%. The rest of the world, China is 3%. I like this one. It is small, but it is proof that we can sell back to China. This is a type of a little thing I try to observe how competitive we could be. U.S. 1%. Okay. We don't want to increase because of Section 301 coming. Next one is on the EBITDA. You already see everything improve. Our reported EBITDA on the first half is THB 44 billion. I think this year in total, we can beat last year adjusted cash EBITDA because we are so close already. Okay?
On the adjusted profit, our reported profit is THB 17.7 billion for the first half, and adjusted profit is THB 12.6 billion. That is the very quick introduction. May I pass to Pisang kap?
Good morning. First of all, I have to thank you. Khun Thammasak already explained almost all what I prepared. This quarter remains highly volatile, mainly due to the conflict of the Middle East. As Khun Thammasak mentioned, all the feedstock costs is shooting through the roof. Naphtha peaked over THB 1,000. All the products, including the polymer price, especially HDPE, the average price is about THB 1,600. Actually, some market is over THB 2,000. All the spreads of the chemicals also expanded. It is not just only the petrochemicals, the polymers, the products such as the fertilizer, pharmaceuticals, and aluminum is also affected. What we have done in the second quarter, as Khun Thammasak mentioned, we adjust our portfolios because we could not run fully our capacity because of the shortage of the feedstock. The first priority is we fulfill domestic demand.
We also try to manage our product portfolios to focus on HVAs to protect our margin. Also, because of the shortage of the feedstocks, we could fully run full quarters, only one cracker. MOC, we higher capacity, but MOC is shut down for three months, whole quarters. LSPE, we run one and a half months. That we shut down the middle of May. We just ship all the pre-work preparations of ethane projects and also turnarounds from the next year to this period. We also will continue doing this until the third and fourth quarters. The feedstock sourcing is very tough, but we have no choice. We have to find from the non-Hormuz sourcing. Also, the execution in the second quarter, we successfully in divestment of Chandra Asri. That can generate a cash about THB 24.9 billion.
Of course, we will use this cash to deleverage our debt and also we will spend for the LSPE ethane projects. So far, the LSPE ethane project on schedule and on budget. Look at the volumes that we sell in the second quarters. That dropped down from the first quarter because of the shutdowns of the ROC and just half quarter running of LSPE. Anyway, the first half of this year, still sale volumes higher than the first half of last year because of LSPE running at least four and five months, 4.5 months.
Vinyl chain also affect because of the feedstocks. That is why the second quarters we run lower than the first quarters. Overall, first half of this year, lower than the last year. This results of the financial performance. Second quarters reported EBITDA will be THB 10.95 billion. But look at the adjusted EBITDAs, about THB 9.6 billion.
That is including LSPE. Without LSPE, about THB 8.9 billion. So with this, make the first half of this year reported EBITDA will achieve THB 17 billion and adjusted EBITDAs THB 11.8 billion, which is much higher than the first half of last year. Look at the profit. It is aligned with EBITDAs. The reported profit for the second quarter, THB 4.8 billion, and adjusted net profit including LSPE, THB 3.74 billion. Overall, first half of this year, reported net profit THB 5.89 billion and adjusted profit including LSPE, a little bit positive, THB 646 million.
For the outlook, it is still very volatile. Look at the end of June, that is seeing the peaceful talks, that MOUs expected that make all the peace talk and energy price drop down. But that falls only two weeks, and then they start war again now, that make all the peace talk increasing day by day.
Even this morning, the crude oil price, naphtha price, starting again at the high level. That is very difficult to manage the situation. Overall supply right now, it is better than the second quarters. Several cargoes, they do not pass through Hormuz. They try the new route through the other sides. Also, the supply chain is arranging. That makes the supply situation better than the second quarters. Anyway, we look at the ethylene capacity, and the new capacity this year is about 5.5 million tons, especially the second half of this year, that the new capacity will come on stream, on time. But the several capacity consolidation and also the capacity rationalization still go on. Also, the old and small capacity in China will be shut down. That will make the supply and demand more balanced. In short, the third quarter, fourth quarter is very challenging.
We have to keep close eyes on the market movement and also the changing from the physical side down to the customer side. We have to carefully manage the situation well. PVC, in fact, the third quarter is considering as the low seasons. But the price is also moving up because of the physical pushing, and the demand is quite weak in the third quarter, and normally, the PVC chain will back against the fourth quarter after [inaudible], as the construction side continue. ROC, we also plan to start up again with hope. With the current situations, that is also very difficult to predict what happen, even though right now we rely on Hormuz almost 100%, no any cargo from Hormuz. Anyway, just this morning, the Red Sea also faced a difficulty because Houthi in Yemen last night attacked two vessel of Saudi Arabia.
That also makes the tankers, now they try to reroute. If they reroute through the Cape of Good Hope, that will take another two weeks. That is very volatile, and we have to adjust our supply chain based on situation. Also, the last quarter, we already announced we will start the projects with PTTGC. That is still go on, and we will announce at the end of this quarter. Overall ethylene capacity, actually, before there were war resuming, we saw the capacities of the global ethylene improve a little bit. In fact, overall capacity in Middle East could not start because of the severe damage by war. Anyway, overall the capacity improved. We reduced only 12%. During the war, that is the 20%. That is all on my part. Pass to P'Boy, please.
Good morning. Today, I am pleased to walk you through our CBM transformation. Our core objective is very simple, is enhance organizational efficiencies and unlock the business value and elevate customer experience. To understand why, let us first look in the market headwind. For the regional overcapacity in ASEAN has lead to intense price undercutting. Economic uncertainties continue to drag down the construction market. Despite this challenge, government infrastructure investment and active BOI incentives are driving momentum. In response, we are actively elevating SCG CBM competitiveness to two strategic pillars. One is we have integrated our offerings into three pillars from the CDS, from the cement building material and system solution, to meet living demand for the customer. We have removed operational redundancy and streamlined our workflow to achieve more efficiencies. Move to the next slide. Our transformation being executed two segments. One is B2B, another one is B2C.
For the B2C side, our core strategy is delivering customer product and service offering through the key account management that Khun Thammasak mentioned earlier. We have shifted to the one face to customer with increased speed to respond. Furthermore, we are developing one single project data platform to manage the project seamlessly. For the B2C, our main objective to enhance customer accessibility and convenience. We are integrating our living housing system, covering everything from roof, wall, fence, and landscape system across all sales channels to provide a comprehensive solution for the customers. Also, we have key installer management to ensure our service to customers. For the next CBM transformation framework, we are targeting a further THB 3,000 million in EBITDA value creation for productivity improvement by 2028. Here is our performance in the first half year.
This first half year, we have the focusing on the increased business opportunities, achieve 50% year-on-year growth to cross-selling our product portfolio and increasing sub-dealer coverage by up to 200 branches. Second, we are executing plan to enhance efficiencies and expect to deliver approximately THB 1,000 million for this year. In term of the financials for our revenue demand for the second quarter, our sale revenue saw strong momentum, with 3% year-on-year growth, primarily by our expanding international trade. For the EBITDA side, the Q2 this year, adjusted cash EBITDA reached 12% year-on-year, driven by our strategic cost management initiative. As you know, we stopped bidding since last year and exit some business bidding from the last years. In term of the profit, improved both quarter and half year, following by EBITDA performance. For the business highlight, the smart value product, we have officially launched QMAXX.
It's a pricing brand. No pricing brand. It's a smart value product, QMAXX Cement, offering to reliable quality with the optimized value. Another one is HVA. We launched the new product. We call the SCG DECAAR Wall Molding, ensure high aesthetic standard and seamless premium decoration. Another one is market expansion. Our showcase at the Sydney Build Expo in Sydney this year is a smart strategy entry to the global market with the SCG cutting-edge innovation for residential living. For the market situation, the market dynamic is, first look at the Thailand public infrastructure initiative remain our primary growth engine, helping total market stability. Meanwhile, the surging renovation sector is accelerating, recovering the Thailand building material market segment. Look at the regional market. Indonesia is a stand out growth market in this quarter, heavily support by the government residential stimulus package and infrastructure.
Vietnam continue its upward this quarter, driven by ongoing infrastructure and the FDI inflow. To conclude our presentation. Let's look ahead to business outlook and effort and priorities. First, regarding the outlook in Thailand, government investment and public budget disbursement will remain key driver for construction market demands. Regional, we expect to see the continuous expand in both Vietnam and Indonesia, driven strong by public trans-infrastructure investment and active private sector project. To capitalize on this opportunity, we are focusing on five key pillars. One is, we have active transition to our one face to customer model. This structure is designed to streamline customer interactive, eliminate organization silo, and drive overall customer satisfaction with more speed and response. We have deepening our market penetration by shifting from traditional product sale to delivering complete system and end-to-end solution.
We are sharpening our competitive edge by scaling cost efficiencies, especially for the use the AF, alternative fuel utilization with technology like we and to invest the chloride bypass and external combustion so we can reduce cost and lower CO2. At the same time, we are continuously refine our product mix to maximize market capture like SVP and HVA. We are actively accelerating both production and export of low carbon cement from the facility in Vietnam to capture growth in regional and global demand. For the SCG Decor this quarter, adjusted cash EBITDA is THB 617 million . Adjusted cash net profit is THB 170 million . Exclude cash restructure expense, adjusted cash EBITDA would have been THB 800 million , and adjusted profit would have been THB 268 million , supported by effective cost management and financial cost management.
For the first half, we reported adjusted cash EBITDA of THB 1,378 million , and adjusted cash net profit of THB 349 million with the total revenue in the first half is THB 10.9 billion . If we exclude cash related and non-recurring item, the SCG Decor adjusted cash EBITDA would have been THB 1,566 million , while the adjusted cash net profit would have been THB 500 million . That all for my part, kap. Thank you, kap.
Kap. Good morning, kap. Let me start with a quick recap on the SCG key performance. I think overall, SCG had a quite an impressive Q2, and in fact, impressive first half of this year. Revenue for Q2 was about THB 32 billion. Domestic demand improved in Thailand, Vietnam, and Indonesia. While they are able to increase the selling price, that result in an improvement in the revenue both year-on-year and Q-on-Q. EBITDA and net profit follow the improved revenue growth. EBITDA for Q2 was THB 5.8 billion , and net profit was impressive at THB 2.3 billion for the quarter. Such improvement was led by the turnaround of our packaging operation in Indonesia and also the improve in the business of the fibers and the ongoing cost optimization that the business has been doing during the past few years.
For the first half, revenue was about THB 62 billion . It dropped slightly year-on-year because of the softer volume towards the end of the late Q1. But EBITDA and net profit follow the same trend of the Q2, improve both year-on-year and half-on-half. First half EBITDA was THB 10.4 billion , while the net profit was THB 3.8 billion , compared to THB 1.9 billion of last year. Moving on to the financials. SCG, in terms of the financial position, remains very strong with the continued deleveraging. I think we are moving in the right direction, but surely we will not lower our guard. We will continue to place emphasis on the financial stability and the financial discipline. Our net debt, as Pipol mentioned, has reduced significantly by THB 39 billion from the end of Q1. That comes from two factors.
One is the very strong EBITDA from operation, and second is the success of the divestment of the Chandra Asri 14.8%, as Pisang mentioned, that result in cash coming in around THB 25 billion. With that, our net debt to EBITDA declined significantly from 5.5 x in 2024 and 2025, down to 3.7 x, which is considered very, very good. And net debt to equity also came down from 0.7 x down to 0.6 x. Cash on hand is very strong at about THB 77 billion. Working capital increased a little bit to THB 87 billion. That I didn't consider normal, following the increase in the sales revenue of our business unit. But if we look at the net working capital in terms of days, it has come down from 68 days to 66 days. That was a good sign.
On the interest cost, it came down from 3.3% in the first half of last year to 3%. With the lower interest cost, lower net debt, that result in the lower interest burden for SCG. CapEx, as Pipol mentioned, that we still control on the CapEx. First half is about THB 11.1 billion. Look at the pie chart on the above right-hand side. 34% of the CapEx from CBM, and that's pretty much on the maintenance and on savings project. 28% from the chemical business, so pretty much on the LSPE ethane project. We still maintain our target of the capital expenditure, roughly about THB 30 billion for this year. That's the end of my presentation.
Okay. Now let's look out. Second half of this year, what is going to happen? Actually, no one knows that what's going to happen. But something that we start to see, I talk to many people, everyone point out to the same thing, that second half will be more severe than the first half. First half is tough, but second half could be tougher. This is something that all the industry players are pointing out. Because it's not just Hormuz. Now it's spread into the Red Sea, and the strategic inventory is depleting. So of course, they can push the oil up to Suez to Good Hope and come to Asia. And Pisang already said it's two weeks more, costs more. So it's not like a totally, let's say, block the Bab-el-Mandeb will be the end of the world. No, actually, it's not.
They can still go up to Suez, right? But definitely the energy price will going up, the freight cost will going up because it's longer distance. That's the realities. Volatility is still there. Okay? Even bigger volatilities. Energy price volatilities and security of the crude, that will be issue. But I just want to point out another gray rhino that's coming in is super El Niño. This is coming, which we have to prepare. We have to manage the water. It will not happen this year. The impact will not be visible this year. But if we have done the right thing this year, we will avoid the big water shortage next year. That's the meaning. So I put up just to say that we are working on this and calling for action, the collective action, especially on the Map Ta Phut and the eastern seaboard.
IMF point out that cost of war, cost of inflation, higher debt, global debt will slow down the global economy, which is the key concern for everyone. Will you see the growth? At 3%, but you have to look at the AI drive growth. If you deduct that one, you see the real sector growth, even worrisome. This is a reality we are seeing, and we have started to utilize the Section 301. That is another thing we need to deal with it. The good thing is ASEAN still grows. We are living in ASEAN, that means we are still growing. Vietnam still grow, Indonesia still grow, Thailand still grow, Malaysia still grow, Philippines still okay. We are living in a more economic vibrant area comparing to Europe and the others. That is the good thing we have. What should we do?
As I mentioned, we have to deal with the disruption. We have to deal with the volatilities. We start to get used to it. Every time we hit the disruption and volatility, we start to learn the bottlenecks of our operation, and we have debottlenecked it. We start to learn that non-Hormuz is important. We start to learn that that channel could be utilized, this and that. Every time we are experiencing disruption, if we adjust quick enough and if we look at a medium-term view, we can debottleneck our supply chain constraint. That will help us. Of course, we want to speed up the AI, that AI and robotics will be very important. We are full speed on the AI. We will implement a major AI project to enhance our end-to-end operation. Financial discipline, people have already emphasized.
Into the turbulency, you need a ship that can withstand. In term of the business, that means a stronger balance sheet. Of course, we still take care of the shareholder as we are stronger to do that. That is the immediate action. We never waver on our two-year target because we know that if we complete this competitive strategic project on the right-hand side within the end of next year, we are going to be much, much better than today. We step steadfast moving towards the [inaudible]. We follow up to speeding up and hope that we can provide you more. The progress now is pretty impressive on the 10 [inaudible] you see. Discussion with the PTTGC is still ongoing. Cannot say much at the moment. People are still tirelessly create a customer-centric organization that will not only streamline but also fast respond to the customer.
We still grow one of the most vibrant area of the cement and building material growth in the region is Vietnam. We are double down in Vietnam to capture and create. People are creating a long-term growth platform in cement and building material in Vietnam. That is what we are working on. Packagings continue to grow in ASEAN and expanding in Indonesia, in Vietnam, in Thailand, of course. ASEAN optimization, robotics, and of course, clean energies. You could see that we are not adding any unnecessarily item into it. But these are the very, very important item. There are some item we cannot announce in detail, but we are working on it. Okay? Objective is by the end of next year, we have, as an analogy, some six-pack. Now only one-pack, but anyway, it is coming.