With the utmost respect, thank you. This afternoon, we would like to welcome you to the analyst conference in the third quarter. Today, we will cover the performance of nine months and also third quarter of this year. My name is Sornnarin Bangkedphol from the IR team, and I will be your host on this afternoon's session. We will begin with the presentation by management, and we will have the Q&A session right after. Please allow me to introduce and hand over the floor to SCGP CEO, Mr. Wichan Jitpukdee, and SCGP CFO, Mr. Danaidej Ketsuwan. Thank you, sir.
Good afternoon, and [Non-English content] . Time fly so fast, we meet again in the third quarter financial result. First of all, I would like to thank all the analysts that attend the SCGP analyst conference for the third quarter of the year. May I start with the consolidated key financial nine months in year 2025. With the sale revenue in nine months, THB 94 billion, which is down 7% year-on-year. This revenue fell year-on-year at the selling price, especially for the integrated packaging business and fibrous business, has been declined in line with the regional market trend. However, the sale volume has been increased 3% year-on-year, so mainly come from the selling price. In term of the cost of goods sold, still maintained at 82% because of the sale still maintained, because of the discipline cost management and also the cost reduction.
Thanks to the team for those implement AI and the machine learnings. For EBITDA for nine months, THB 12.6 billion, which is down 5% year-on-year. The profit, THB 2.8 billion, which is down 24% year-on-year, while the profit margin is at the 3%. The EBITDA and net profit are decreased year-on-year, reflecting lower revenue, including the effect from Thai baht appreciation. Just for a bit of detail, the performance of the business in Vietnam and in Indonesia, especially in Vietnam. The performance for the local currency has been improved year-on-year, but when it was consolidated to the SCGP level, so it is lower than last year because of Thai baht is strong. In the opposite way, the Vietnamese dong is weaker, so that caused the effect from the Thai baht appreciation.
For the business segment for nine months, we see that the integrated packaging business revenue from sale is THB 71 billion, which is a reduced 6%. EBITDA is THB 11.1 billion, which improved 6% year-on-year. Thanks for faster improvement in term of the operation. IPB margin improved year-on-year from the sale volume and also better Indonesia, as mentioned. In addition to that, the efficiency of cost management also improved. For the fibrous business, the third quarter was not so good because of the sale revenue down to THB 19.3 billion, which is down 9% year-on-year. EBITDA has been down 50% year-on-year to THB 1.5 billion, and led to the EBITDA margin still at 8%. This profitability of the fibrous business declined mainly from the substantive selling price and across all product categories. Actually, mainly from the Brazil, U.S. tariff.
Now it is already accepted, so the price of those products, now it starts to pick up. In terms of the business portfolio at nine months, we see that the revenue from sale by business unit. You see here the packaging paper accounts for 37%, still the same, even we have effect from the Thai baht appreciation. The good thing is that the consumer packaging grew to 47%. We have planned that we will reach 50% by 2030. Now we are in discussion that we are in the process of reviewing the target of the consumer packaging. In terms of the revenue from sale by end destination, Thailand is still the main at 44%. The rest of ASEAN is 34%. This, if we remove effect on the Asian rate, actually the ASEAN will be improved from 34% to 37%.
For export, the total export is still at 16% or more the same as last year, which is 17%. I mportant here is that you see in China, it has been reduced from 8%, 7%, and this year, nine months, the export to China is down to 4%. This from the strategy that we call we loose coupling from China. On top of that, the country that will receive the allocation from China, we call here South Asia, meaning India. India, we do export increase to 4% nine months this year. T hanks to the team that we can do allocation and we can do export of those products to Southeast Asia. While the export to U.S. still maintain at 4%-5%. That the nine months of the business portfolio.
In summary, nine months in terms of the growth of the business, we give the priority to the expansion consumer packaging, especially in ASEAN. Today, we announced the M&A deal. Mr. Danaidej will explain more in the detail. On top of that, we enhancing our packaging solution in Vietnam and also in Thailand. We do joint venture with Howa Sangyo, which specialize in the pet food flexible packaging. In terms of ASEAN domestic, we still focus starts from last year that we lose something from China, and we focus on the ASEAN domestic. This come out and the result is much improved this year. In terms of the financial and operational excellence, FajarPaper deliver a positive EBITDA for the two consecutive quarter, and we are confident that this positive EBITDA can be continued.
In terms of the fibrous, we see the sign of improvement in the early fourth quarter this year. M eaning it is bottom out for the fibrous already. This is the good sign in terms of the fourth quarter. In terms of the operational excellence, we focus on the operational efficiency. We use AI and machine learning. Last week, we were in the ASEAN Pulp and Paper Association meeting in Tokyo. There were 10 country joining, China, Japan, Taiwan, South Korea and six country from Southeast Asia.
We see and we exchange a lot, and a lot of interests are to visit SCGP to see how we adopt AI in the machine. N ow we have a lot of guests from regional to visit our factory. This is the idea that we want to exchange those idea to improve the industry efficiency. That is the summary for nine months. For the detail of the business segment review in the third quarter, may I ask Mr. Danaidej help to elaborate, sir?
Thank you, sir. May I start from the market movement in terms of the macro and industry level. If we look first in terms of the manufacturing, we can see that in terms of global manufacturing activity has been increasing in the past few months. If you look at the leftmost chart, we can see that the PMI was increasing in the major economies and also at a level above 50, which indicate more confidence and more expansion. That is one of the indicators to show that global economy was still moderately growing. The second part, in terms of our exports of the major market, the chart in the middle, there was a rising export value in Q3 in, for example, in Vietnam, the export growth was 10%, Indonesia 8%, and in Thailand, quarter-on-quarter was 2%, but in September, it is double digit growth there.
In terms of export, it is still quite pretty much intact. Consumer price index also has maintained in the level that was manageable in most of the country, although in Indonesia was slightly rising. Anyhow, that means the interest rate would continue to be lower in the future, so that benefits the consumer spending. That is the big picture of the economy. Next, let us move to the demand movement in these countries. You can see from the arrows that most of them are pointing up, both in terms of quarter-on-quarter and year-on-year. That is good news. That means all the ASEAN economy, the major economies are growing and quite resilient.
In Indonesia, there was a slight drop in quarter-on-quarter in the third quarter, and that has to do with the small issue in the domestic unrest that has interrupted some consumer spending and manufacturing activity slightly in September. Otherwise, all the economies are doing quite well. When we talk about the different segments, starting from consumer staples, the domestic consumption is stronger in terms of responding to the year-end activity. We have anticipated that. Toward the end of Q3, we already see the order picks up for the year-end preparations. Also, the export of some segment, particularly in terms of frozen food and canned food, to be sent out of this region to developed countries. That is a major export item, and it has been growing as well.
Domestically, however, there is some segment like alcoholic beverage and some of the agriculture products that has been a little bit low due to the rainy season and the Buddhist lent. Next on consumer discretionary, the good news would be on the recovery a little bit in term of the apparel and footwears. We see growth in the export of these sectors. F or durable goods, demand was still twice sluggish. Same factor from last quarter, meaning the relatively high household debt that hamper more cautious spending by the consumer. From these two segments, it lead to the packaging paper demand, which we see improvement in Q3, particularly in Thailand and Vietnam, in line with the overall demand movement.
The export into China market has softened and reduced because of the lower demand, and we see that from data from the Chinese authority as well, that the importation of packaging paper product has been declining. Anyhow, next one would be on the food service, which on the positive side, both in terms of QSR and retails are very good because of the seasonality for the European and American summer season, as well as the QSR promotional campaign. W e also face tough competition from the Chinese manufacturers in this particular market segment. In terms of pulp, the market price dropped. I n late Q3, some of the dissolving pulp market has rebound a little bit. That is the situation in terms of the overall economy and the demand. Let us move to our performance, the SCGP performance.
Here we start with the sales revenue, which is about THB 30.4 billion. That is a drop in term of year-on-year and quarter-on-quarter. Mainly volume increase both year-on-year and quarter-on-quarter, but the factor that affect the revenue would be on the price, which was lower both in term of year-on-year and quarter-on-quarter. If you look at EBITDA, let us first from the EBITDA of year-on-year, it is a significant increase of 19%, now at THB 4.15 billion. This improvement is due to better cost, also raw material cost like RCP as well as utility cost that has dropped considerably compared to the same period of last year. Another factor is that the Indonesian performance of FajarPaper has also improved year-on-year. I f you talk about quarter-on-quarter, EBITDA dropped slightly due to the factor of price, because price was dropping a little bit.
Overall margin has improved slightly from 13% to 14% quarter-on-quarter. If you look into the profit in the third quarter was 953, and this increase year-on-year and the drop quarter-on-quarter is pretty much in line with EBITDA. I f we look into Q4 of this year, if you remember last year in Q4, our performance was not very good. We have a slight negative in term of net profit, and that is because of the few factors which will not happen this year. In term of Q4, going into Q4, definitely we have a better year-on-year performance. If you look into the core profit numbers, in fact, in Q3 was slightly better than Q2. Next, I would be going into by segment. Starting from integrated packaging business. Revenue was THB 23.4 billion, a drop from last year and also last quarter.
Mainly, quarter-on-quarter volume was relatively stable, but the price factor again in term of year-on-year volume actually increased, but price also dropped. Both quarter-on-quarter and year-on-year are the main factor affecting the revenue would be on the pricing. Polymer packaging quarter-on-quarter revenue declined slightly because of the off-peak season of some agricultural products. The sales of packaged foods and frozen food demand was affected, and also the labware and medical supply in EU was low during the summer months. For fiber packaging, revenue was relatively maintained. Daily consumption was good. Thailand operation declined slightly due to the seasonality as well as the alcohol beverage impact. Packaging paper sales volume are stable, but the price declined by 2%. When we look into EBITDA was THB 3.8 billion, which is a flat or in similar level as last quarter and much better than last year.
The factor that contribute to the better EBITDA from last year was the lower RCP cost mainly. Also energy cost and FajarPaper operation. Margin year-on-year improved from 12% to 16%, but stable quarter-on-quarter. Next, for fibrous business, revenue is THB 6 billion, year-on-year down mainly because of price factor as well. Volume-wise, it is relatively stable. Q1, Q2 volume actually increased for fibrous business, but price was impact. Anyhow, when you look into each segment, the food service revenue was quite good, as I mentioned in the demand. We are actually doing quite well in term of food service packaging. The paper was decreased because of the impact on the price and competition. Pulp, our quarter-on-quarter revenue rebound slightly because we have better volume of dissolving pulp.
Selling price, as we know, follow the market has dropped, and we believe that the interval price in Q3 was probably the bottom because we have seen a little bit of the improvement toward the end of the quarter and into this early Q4 in term of pulp price. EBITDA dropped to THB 392 million. Year-on-year is mainly in line with revenue, and quarter-on-quarter was mainly due to price factor.
EBITDA margin of fibrous business remain intact at about 7%. Next would be on the core profit and net profit, which in the third quarter, our core profit is THB 998 million. Slight improvement from last quarter, but we have some FX loss. The total net profit is THB 953 million, as you see on the earlier pages. In terms of our financial balance sheet, our net debt is at THB 53 billion, similar to the end of 2024.
Our net debt to EBITDA is now at 3.4x , which is similar to end of 2024. If you recall, it actually better improved from the end of Q2. We report last quarter of 3.7x, so this is already an improvement, mainly because of better EBITDA in term of this Q3 compared to last year. Our cost of debt has gradually reduced to average year-to-date of 3.8%, and that is because of the lower interest rate across all the countries that we operate. In term of capital expenditure for the nine months, is locked in at about THB 7.4 billion. The budget for this year was still roughly about THB 10 billion. The growth CapEx will be roughly close to THB 6 billion. That would include another CapEx in term of new acquisition that I will be talking about.
That one will be roughly about THB 1 billion in terms of CapEx. In total, together with all the other efficiency maintenance and cost savings, we will be very near target in terms of our investment expenditure. Next, let me update on the situation of FajarPaper. In this chart, you can see that in terms of volume in Q3, the volume was down 3% quarter-on-quarter. The domestic volume has been slightly down. That is due to the impact on the demand that we show in Indonesia. The Q3 demand was slightly dropped from the domestic issues. W e see the rebound in terms of the volume quite strongly in the early part of Q4.
Price also has loose momentum in Q3, but that is because of the start-up of another machine for a major player, mainly on the start-up grade, which is quite a different type of product for the start-up. N ow on a regular commercial grade. In the Indonesian market, the price has already started to increase once again in October compared to September. The trend of price seems to be on the positive upward right now. With that falling volume and price, our revenue in IDR for FajarPaper dropped slightly, and EBITDA also dropped to IDR 2 billion due to the reduced revenue. W e have some key movement in terms of market and expansion. The first is we try to have better integration between our FajarPaper and our box business.
We have attractive use in terms of our internal volume, more than 90% now, and that helps strengthen our competitiveness on the supply chain. We have also increased our domestic portion of the sales to be close to 90%. In terms of operational improvement, we implement using technology to improve, especially on the AI and the automation. We have done five projects, for example, the fully automated material resource planning, use the quality control, use AI to assist in the QC checking. We have RCP management system to manage the RCP with a better time cycle. We have centralized control for stock preparation and also install auto-wrapping machine for the duplex converting line. These are the five projects that would help our operational improvement.
On top of that, in terms of supply chain, particularly in terms of the key raw materials like the RCP, we have increased our sourcing portion to 65%. This has been increasing from roughly 50% for FajarPaper, gradually improving to 54%, 58%, and now at 65%. Being able to source locally would mean they have enhanced the competitiveness in terms of raw material sources. Next one will be on the latest announcement in terms of merger and acquisition, merger and partnership. We just entered into the CSPA to acquire 100% of fiber packaging box business operation in Indonesia. The rationale is the three main ones are first to expand the portfolio of consumer segment. This company, MYPAK, major customers are national brands and MNC brands that is focused on food and beverage and consumer goods.
By having this company, we have expanded our customer network, customer reach to include some new names and new companies. That enhances our SCGP customer portfolio overall in Indonesia. The second part that we have been trying to achieve is to increase chain integration. If you can look at the chart below, by acquiring MYPAK, we will increase our integration level from 18% to 26% and increase our market share from 7% to 10%. We have met with you and other funds earlier, and we said that the best level that we would aim for would be similar to Thailand and to Vietnam, which means integration level of about 50%. That requires us to expand our box business to achieve market share of roughly 20%. With MYPAK, we are halfway there already.
In the meantime, we continue to talk with other potential partners in entering into more box business in Indonesia. This is a solid one that we will be adding toward the end of this quarter. The closing is expected to be in December. This plant is very near to FajarPaper. It has 144,000 tons per year, revenue of about THB 1.8 billion . This will be a good addition and to strengthen our chain and deliver on our long-term strategy to grow the integration in Indonesia. Next would be in terms of our recognition, in terms of our new initiative. We have achieved two ASEAN Corporate Governance Scorecard Awards, and this shows that we are in the top five in country and top 50 companies in ASEAN to receive this. That's one to show that we are committed to good corporate governance.
The second one is related to our CFP carbon footprint and reducing of the GHG emissions. This is the certification that we've done in collaboration with our sixth customer, and this is a SCGP-certified packaging. Some customers will actually put this logo on their packaging to say that this is the footprint of the packaging is so and so. This is one of the ways to show that we are committed to reduce our packaging footprint and achieve net zero transition.
The third one is on innovation, where we partner with Lion Corporation (Thailand) Ltd. and the Marketing Association of Thailand to launch the J-MAT Award. This is a competition that was known as Packaging Speak Out. This is to promote innovation in terms of the packaging. These are the three recognitions that we've done in the past quarter. That's part from me, and next for Mr. Wichan .
Thank you very much, Mr. Danaidej, for really clear explanation. Heading toward the rest of the fourth quarter and into the year 2026. In term of regional growth, we see that we still can do the expansion of the customer packaging and create the value chain integration. The evidence already showed by Mr. Danaidej that today we dispose M&A with MYPAK, which will increase our integration to be 26%. In term for the packaging solution, we also prioritize that expansion and solution across ASEAN. We see the opportunity that all the movement from China and other country to ASEAN, especially Thailand, Indonesia and in Vietnam. We still have a strong cash flow, so the leveraging for the growth among ASEAN may be the top priorities. In term of the economy, start from the ASEAN. ASEAN countries still are really resilience.
This because of relocation amidst the global supply chain has been changing and is on the way. This week, President of the U.S. came to ASEAN and went to Japan. That show a lot of the commitment between the relation among the Southeast Asia, Japan and the U.S. T hat will improve the trade together with the U.S. Look a bit bigger picture in China economy. We see that the China economy expected to be slowed down because of most of the manufacturing move out. This is, we already loose coupling from China since last year, and that drop of the export to China, 8%-4%. Good news that we can do compensate by export to South Asia, mean the India country. Going a bit bigger global GDP, we see the signal of the rebounding.
T hat going to be good for Southeast Asia, for this region and also for the world. Looking forward into the fourth quarter, as Mr. Danaidej mentioned that the fourth quarter of last year, our performance is not that good. We had negative performance in term of the profit. This year, we very confident that we can do better than our fourth quarter last year and lead to the result of this year maybe better than last year. That all for the third quarter at the nine-month summary. We would like to thank our participant for joining the conference today, and we look forward to seeing you again in the summary of the result in the full-year of this year in the next time. Thank you, and [Non-English content] .