Good afternoon, ladies and gentlemen. We are very happy to welcome all of you again to SCGP Analyst Conference. Today, we will cover the performance of the fourth quarter, along with the full year performance of 2023. My name is Pikon from the IR team, and I will be your host this afternoon. As usual, we start with the presentation from SCGP management followed by live Q&A session. May I introduce and also hand over the floor to the two gentlemen, SCGP CEO, Wichan Jitpukdee, and SCGP CFO, Danaidej Ketsuwan. Thank you.
Good afternoon. Sawasdee kub, and happy new year, 2024. Time flies so fast. We meet again on the analyst conference for SCGP for the fourth quarter of 2023, and the whole year of 2023. I will start with the revenues on 2023. We ended with the year 2023 with the sale revenue THB 129.4 billion, which down 11% from the previous year. For the EBITDA, we ended last year with THB 17.8 billion, which down 8% from last year. Good news that the EBITDA margin improved from 13% to 14%. This is mainly from the effort of the cost reduction, both from the energy cost reduction and also the raw material cost, especially for the recycled paper. This helped a lot to improve EBITDA margin. For the net profit of last year, we ended with THB 5.2 billion.
We still maintain the profit margin at 4% and dropped 10% from the prior year. Ended with the core profit about THB 5.1 billion. In the past year, both downstream packaging, both on the polymer and the fiber packaging has been going up a lot, especially in the third quarter and fourth quarter. In the fourth quarter, the container board import in China has been increased also. This is a significant improve in the volume of the packaging paper that export to China. Next slide. In term of the business segmentation here, the integrated packaging business revenue THB 97 billion, which reduce 17% from the prior year. The EBITDA is THB 14.4 billion, which reduce 2% from the prior year. This is again, mainly from the cost reduction from the energy cost and the raw material cost in the integrated packaging business chain.
In term of the fiber business here, the sale revenue THB 24.9 billion, which improved 3%. However, the EBITDA down to THB 3.8 billion, which down 5% from the prior year. Ended with the 15% EBITDA margin, same figure as both integrated packaging business and the fiber business at the same figure at 15%. For the review back to year 2023, last year, we have three main highlight to share with you. First thing about the cost reduction. As mentioned, the cost reduction, especially from the energy, account for THB 850 million. For the raw material cost, especially for the recycled paper, is THB 250 million. This combined end up with THB 1.1 billion. This is the big efforts of the SCGP team. On behalf of the management, I thank them for this effort.
This helped a lot to lessen the impact from the weak demand and also the sale price competition, especially in Indonesia. In terms of the growth of the business, last year we ended with three deals. Even it is not a big deal, it is a small deal for three deals here, but it created a better future. It created more future and big future, especially for the medical supply and labware segment that we want to focus more in the future. In terms of the solution and the services, we ended with the packaging solution from 31% to 35%. This is to create, we call, the customer stickiness and customer convenient to buy all the packaging from us, because we have both in terms of the paper packaging, fiber packaging, and also polymer, even we call the high performance packaging. However, we have a highlight. We also have low light.
As we know that the year-on-year have weak demand of the packaging paper, especially from China. That result led to our operating rate has been reduced. Mostly we have run more than 90%, but last year in the range of 80%-85%. This is the operating efficiency that we match with the demand. In terms of the selling price, especially in Indonesia and Fajar, due to the Indonesia paper mill, most of them are export to China also. When the demand from China has been dropped, the local and price competition in the country is very high. The price decreased 28%. However, the bottom was in October, November, December and January, the price gradually increased for the packaging paper in Indonesia.
For the EBITDA from the power operation, last year a bit dropped from the prior year because of the prior year in 2022, the power price has been the record high. So last year led to the EBITDA from the power operation has been reduced. In terms of the business portfolio, the figure in terms of the segmentation and revenue by the business still mostly almost the same. Integrated packaging business accounted for 75%, fiber business accounted for 19%, and the recycle business accounted for 6%. In terms of revenue by destination, Thailand still maintained at 41%. ASEAN exclude Thailand at 35%, Europe 5% and the rest of the world, meaning export at 19%. This 19% meant a lot to us. You see here, 19% we export to China are 7%. In the past, almost half.
This year due to the demand in China has been dropped, we try to find a new market and help to compensate and lessen the impact from the Chinese market. In terms of the consumer -linked, they still maintained at 72%, they sell a lot especially during the demands of and crisis because of the consumer product, they still consume from the consumer. Industrial packaging still on the figure at 28%. In terms of the market movement here in the fourth quarter of last year, we can see that actually the ASEAN demand was driven by the domestic consumption with the gradually export recovery. You can see here on the right-hand side, the top one, Thailand and Vietnam, the export QoQ in the fourth quarter has been improved. Also in ASEAN and China, PMI also maintained in China very flat, but in ASEAN reduced a bit.
In terms of the import container board paper to China, we can see here start from the beginning of last year to December of last year. The volume has been gradually improved in terms of the imported container board volume to China. Last but not least, for the market movements that we see in the past month that the RCP supply has been. We see that this view upward trend in the RCP price. This is mainly due to the demand pick up of the volume of supply of the container board paper. This show that the RCP price start to increase. Also we see that the geopolitical instability, especially in the Red Sea, that held to a very volatility of the freight cost that are passed to the Red Sea.
We have a product from Vietnam that have to pass through the Red Sea, but that a small portion we send export to Europe for the food service packaging. That lastly for the total year of 2023, the whole year and the market movement. Next, may I ask Danaidej Ketsuwan to present in the detail of the fourth quarter.
Yes. Now we focus on the fourth quarter, starting from the movement in terms of demand of the key countries. If you look at here for our key economies, key markets that we operate, you see it's a mix. In Thailand, in a QoQ basis, it was slightly weaker in the fourth quarter compared to the third quarter. In fact, the momentum of the demand was quite strong in October and November, but start to taper off in December a bit more than we anticipated, meaning that the customer stopped to taking new deliveries sooner and also on the retail side, consumers defer spending to the year after that. In December it was weaker, resulting in a weaker demand QoQ.
In Vietnam, we have an improvement in the term of QoQ, and that's because of the upcoming Lunar New Year or Tet holiday in Vietnam, which is a very big festival. Manufacturing activity was increasing for the period of the fourth quarter to fill up the demand for that event. In Indonesia, the third quarter was particularly softer than usual. In the fourth quarter, the momentum that was picked up from the end of the third quarter continued. It contributed a positive in the fourth quarter. In the Philippines it was rather stable because of the long holiday, the Christmas season, which start late in December and last about a week there. But if you look at the year-on-year pictures in most of the economies are doing better.
The demand is improved in Thailand, in Vietnam and Indonesia compared to 2022, which was at the low base due to the strict Chinese lockdown at the time. When we look at each of our segments or each of our operations for the downstream fiber and polymer packaging, which are closer to the consumers, we can see similar pictures from the previous quarters in that consumer staples, things such as food and beverage or FMCG product, consumer products are still going quite strong on the domestic consumption. That's in line with the increase in tourism and business in the spending of the festivity toward the year-end. Also, the export of some sectors are doing well, such as frozen food and pet food. But consumer discretionary items like garment and footwear or home electronics, those are still not growing very fast.
It has picked up somewhat in the earlier part of the quarter, but then slowed down in the later part of the quarter. For packaging paper, the seasonality, meaning that toward the end of December, people stopped taking deliveries, and so it was particularly weaker in December, especially in Thailand and the Philippines. But the good stories is in China, the import volume of packaging paper that we can sell on the export side to China still continue to be strong in the fourth quarter on a month-on-month basis as well. The price in that market increased a little bit in that period. For food service packaging, in general, it was an improvement because that's in line with the year-end travel and the demand as people do, tourists increase. The consumption at the QSR or the fast food chains generally increase. So that contribute positively to the food packaging business.
With the exception of Malaysia, in which some of the fast food brand has some decline in the consumption due to the geopolitical conflict in the Middle East that some brands are not selling very well, and consumer shy away from those. For packaging material recyclings, we have an operation in Europe. The demand in Europe is still weak, consistent with the consumer spending over there. But it was compensated by the higher demand for the ASEAN and Indian paper mill who are restocking. Next, we'll move on to the financial performance for the quarter, starting from the revenue, which we locked in at close to THB 32 billion. That's a drop of 5% year-on-year, but an increase of 1% QoQ. For both QoQ and year-on-year, volume actually increased.
But the factor that contribute to the drop year-on-year and slight increase QoQ was more on price factor, which declined. In term of EBITDA, both QoQ and year-on-year show an increase. For QoQ, increase of 4% was mainly from the fiber business, because for the IPB integrated packaging business, EBITDA was declining. But for the year-on-year, EBITDA showed a positive increase on both IPB and fibers. So that leads to our overall EBITDA margin improvement from 13% to 14%. In term of net profit, year-on-year also increased, following the same trend as the EBITDA, which was increased. But in term of QoQ profit, it was a decline by 8%, and that's due to increase in all of the components after EBITDA, such as depreciation also increased, tax components also increased, also our interest costs also increased.
That leads to our net profit of THB 1.2 billion . Now we go into the picture of each chain, starting from the integrated packaging business. The revenue for IPB is close to THB 24 billion for the quarter, and that is - 5% year-on-year. The drop is mainly due to the price factor of packaging paper, mostly. For QoQ, was a slight increase of 2%, and this is coming from the increase in revenue of our segment. Polymer packaging also increased, fiber packaging increased, packaging paper revenue also increased. For polymer packaging, the increase was roughly about 3% QoQ, and that is come from the stronger sales in a premium segment, such as processed food, personal care, pet foods, as well as medical supply and labware.
For fiber packaging, the increase in revenue was about 1% QoQ, mainly from the strong sales in Vietnam and also the Indonesian, which has the election-related spending. For packaging paper, an increase of about 2% QoQ, but the volume increased 5%. That is both from domestic and export. But the price dropped about 4%, and that is mainly a product mix. If we talk about the Indonesian price, it actually improved within the quarter. If you look at the quarter-on-quarter basis, the price seem to be flat. But in fact, if you talk about the end of the fourth quarter in December compared to the beginning of the quarter, which is at a low point, price has improved by about 6% and continue to improve into Q1. Volume in Indonesia also improved quite significantly in Q4.
Our operation in Indonesia has a 20% volume increase QoQ. Moving to EBITDA. EBITDA is close to THB 3.5 billion, and that is an increase year-on-year of 32%, mainly from the volume of our packaging paper. Also because of the cost was down for this year compared to the same period of last year. For Qo Q EBITDA is slightly down. But if we talk about in the box and the polymer, EBITDA was actually improving quite well on those two business. For example, in the box business, EBITDA improved about 20%, for the polymers, about 10%. But for packaging paper, although the revenue increased, EBITDA for the quarter dropped, and that is attributed to the higher RCP cost in the fourth quarter compared to the third quarter. Next will be fibers business. Revenue is about THB 6.1 billion , and that is a drop of the 2% year-on-year.
We have an increase in the volume for the business chain, but the price is down, especially for pulp. For QoQ, food service and paper revenue was down while the pulp increased. For food service packaging, the reason for the low is from volume, especially on the food service part, in which it is a seasonality. In the winter, people consume less because of the fewer outdoor activities, fewer parties, and all the food service packaging are normally used on those occasions in the area where Go-Pak has the customers. That contributed to the drop in volume and leads to the drop in the revenue of food service. For paper, revenue was down by about 3%, and that is due to the decrease in price factor. For pulp, it is up. Pulp revenue is up. The volume was also up, and also the global price in this period also went up.
Moving on to EBITDA, we achieved EBITDA of about THB 1 billion. That is a 13% increase year-on-year, both due to higher sales volume as well as lower operating costs. Same pictures as QoQ, we have improvement in EBITDA, mainly due to improved cost position, especially in the pulp operation. That is for the financials of the quarter. Going now to see the financials back to the picture of the full year. We have our sale revenue of THB 129 billion, but without M&P, the drop will be higher. M&P contribute close to THB 20 billion in term of revenue for 2023. That is an improve from the year earlier. If you look at EBITDA, also our M&P contribute roughly about THB 2 billion similar to the year before.
If you talk about the contribution or EBITDA margin from M&P, if we exclude the recycling business, which generally have a low EBITDA margin due to the nature of the trading and the sorting, we will have the M&P EBITDA margin of roughly about 17% compared to the overall existing business of 14%. For this quarter, we have very minimal adjustment in term of core profit and net profit, so the figures on the two are practically almost the same, a minimal adjustment. Next will be in term of our financial position. Our net debt now stands at close to THB 32 billion. That is a decline from a year earlier. We have now cash on hand about THB 17 billion at SCGP and also at our subsidiaries.
In total, we have interest-bearing debt close to THB 50 billion, and the average cost of debt is about 4.1% for the year. The higher interest rate of mainly from our overseas subsidiaries. That leads to our net debt to EBITDA of 1.8 x and debt to equity ratio of 0.9 x. Also, we have announced the dividend for last year at THB 0.55 per share, and that is equivalent to a 45% payout to be paid in April. On the CapEx side, our CapEx for the year come in short of THB 9 billion. As you can see, the part that is lower than the year before would be on the growth CapEx, which is about THB 3.5 billion in the last year. Our M&P came in a bit late. It came in the fourth quarters.
We have three transaction concluded in the fourth quarter, but two of them, the size was not that big. In total, together, we spent roughly about THB 1.6 billion on the three M&Ps, and the rest of the THB 3.5 billion will be from organic expansion. We also have about THB 3.2 billion in term of CapEx for the maintenance, ESG, and innovation. These are projects like solar power, automated plant, as well as recycled plastic pellet, for example. This lead to the update in term of our projects progress. On the M&P front, we have concluded three transaction. One is in polymer packaging in the U.K. This is more or less to gain channels and customers for our flexible packaging business. The investment size is THB 475 million, for 100% share. This will contribute revenue per year of about THB 500 million.
Another one is Bicappa Lab, which is focused on pipette tips. This is a medical supply lab run in Italy, which will complement our Deltalab in Spain in term of the portfolio of offerings. The investment size quite small, THB 125 million. We acquire 85% stake. The revenue contribution would be about THB 100 million a year. The bigger one will be Starprint Vietnam, in which the deal was completed in December with investment side of close to THB 1 billion for a 70% stake. The company will introduce new solution to Vietnam, for example, folding carton as well as rigid box. Revenue for the company is approximately THB 1.5 billion per year. The three M&Ps altogether will contribute about THB 2 billion per year of revenue to SCGP in this year.
For organic expansion, we have completed our expansion of the Peute in the Netherlands that we moved the location of the sorting facility to be close to the Rotterdam port. They will help a lot in term of logistic cost, and also double the sorting capability from 1 million tons a year to 2 million tons a year of paper, and from 100,000 tons a year of plastic to 200,000 tons. That is already completed and run at the new plant since November. We also have one ongoing expansion in Thailand for the fiber packaging, and when it is completed in this quarter, it will add about 10% of capacity to the Thai operation. The next one will be an update on our North Vietnam packaging paper plant that we announced earlier with a budget of close to THB 12 billion and for the capacity of 370,000 tons.
We talked earlier about the delay of this project. Right now, the EIA was already completed and granted by the Vietnam government. Land preparation, as you can see from the pictures, are almost complete, meaning that the land is almost ready for use. However, we have not engaged any further procurement in term of engineering design and suppliers for the equipment, because we want to wait and see the situation in the region in term of supply and demand. We will make a decision in term of this project again in later part of this year toward the end of the year. Next will be in terms of our future growth. You can see in term of our CapEx, we anticipate the spending or the CapEx investment in 2024, this year, of about THB 15 billion.
That is exclude the part for the potential acquisition of Fajar share. This will be for growth CapEx, both M&P and also organic expansion as well as the maintenance and ESG and innovation of all things. This is our forecast for next year. If we take together with Fajar acquisition, it will be still below THB 40 billion. This is to achieve our growth target for 2024 with a revenue target of THB 150 billion, which is a growth of about 15% compare to the 2023. The criteria for our investment would be to expand our customer coverage. This is the most important one, like you see in our Law Print acquisition. Also, we would like to enhance our products and service offerings and entering into the new attractive markets. This is, for example, when we enter into Starprint Vietnam.
We also look to acquire new technologies and skill, for example, for the Bicappa in Italy, this is for this reason. Also to increase our revenue and cost saving. This is, for example, our expansion of Peute in the Netherlands fits with this criteria. We look into this criteria when we do our investment and our expansion going forward. These are the updates on the business. Wichan will be talking about our new innovative products.
Thank you, Danaidej Ketsuwan, the very well explanation and presentation. Thank you very much. Now move on to the innovation from the renewable eucalyptus wood to make the bio-PET. Last year, 2023, the proof of concept had been done, technology verification had been done, and the pilot testing had been done also, and we are reviewing the report. We spend roughly $2 million for this phase. The next phase, this year, we do market study and also our partnership verification because this is quite a big project, so we have to find a good partner. This year we focus on the partner verification. One more thing here. Since now is a down cycle of the chemical that lead to the PET, the price has been reduced.
Now Origin Materials and the team are also explore to the new journey to compare with the bio-PET that from the eucalyptus wood, we make the CMF. From CMF, we make the FDCA and combine with the bio-MEG, become the PEF, which the molecular and molecule of the PEF are quite comparable to the PET. However, the PEF has more very high barrier property, meaning PEF much better than the PET. This will help to make the PET or PEF from eucalyptus wood more competitive. Let's see for the future. Anyway, this year we focus on the partner verification and the market study. In term of the climate change, we go to next slide.
In term of the climate change, we target that by the year of 2030, we will reduce greenhouse gas by 25% from the base year, which is 2020. Now are past the meaning 2.5% of greenhouse gas reduction per year. This three-year pass, so we set target as 1.5%. Congratulation to the team that for this year we can reduce to 19.5%. However, this 19.5% come from two main factor. The first main factor is the effort of the team, especially in Thailand here. The uses of the alternative fuel, especially for the biomass, has been increased from 31% to 36%. This help to lessen and this help to reduce amount of the coal uses in the process.
Another portion is that, as I mentioned at the very beginning, t he run rate and utilization rate, is about 80%-85%, but normally we run at more than 90%. This helps to generate greenhouse gas lesser. These two factors lead to estimate for this year about 19% or 1 million ton reduction of the CO2 of greenhouse gas. This is just an estimation because we have to verify for the third party verification. Hopefully, in the end of the first quarter, we finish all the verification. When we see the figure, it should not division from this much. In addition to the greenhouse gas emission reduction here, in the past year, we also achieved ESG recognition. It starts from S&P Global. As we know that we did IPO in 2020.
On the first year, 2021, we did a volunteer to apply to S&P Global. When the first year passed, I mean 2021 passed, the second year, it means 2022, S&P Global invited SCGP to be a member in term of the emerging market. The first year in 2022, we got 86 score and top 1% in the packaging business. Last year, 2023, we also got the 85, which reduced one score, one point from 86 to 85, but we still maintain at top 1%, meaning we are the leading in the global ESG score in term of the container and the packaging sector in year 2023. For the SET ESG Rating Thailand, of course, last year we got the two award, best sustainability, which are two year, two consecutive year. We also received innovation award and also two consecutive year in term of innovation.
As you see here, SCGP places importance on the research, development, and innovation. This is a result of our research and development also. Last but not least, we also got the rating triple A from the SET last year. Next is the outlook in 2024. We are still growing and we still do the programmatic M&A, which we focus in ASEAN and new growth frontier. Of course, we have to do M&A mainly in ASEAN, except for the technology or India that we are of the ASEAN. We also started to have the new frontier, especially for the medical and related labware, food services, and also bio solution. We also improve the service level, which can build and create the customer stickiness. In term of the cost reduction, energy cost and the RCP cost, sourcing, inventory management, are still the key to achieve the cost reduction for this year.
In term of the external factor, we see the demand from ASEAN start to pick up, especially from Indonesia that we saw it. Along with the export also recovery, as mentioned at the very beginning that the Thai and Vietnam export seem to be starting to improve. In term of the inflation, the inflation in the U.S. and Europe started to reduce in the U.S. down to below 2%. In Europe, the inflation is roughly about 2%. This helps to slow down or stop to increase the interest rate, and this will increase the purchasing power. In the end of November and starting for the January this year, we see the RCP price seem to be upward trend due to the demand pick up, so the demand for the RCP also pick up.
However, the energy cost, we see that it sideways to a stable or plus or minus. Last but not least, also for the important the Red Sea conflict and also geopolitical conflict that make the freight cost volatility, let's see in the a few weeks. Look at year 2024, we still focus in the five pillar. Start from the performance enhancement. The big issue for us is the Indonesia operation, especially for Fajar. We have to do turnaround, and the turnaround has been implemented since the fourth quarter last year. The price bottom in October last year and start to increase. Even in Indonesia, the operating cost, variable cost, is among the lowest in our four country operation. However, the price still the challenge that we have to improve, and we see a good trend here in Indonesia.
In the Philippines also, we have to improve the performance enhancement also. In term of the operational excellence, the cost reduction and the RCP cost management and yield improvement has to be continued. M&A also, as mentioned in ASEAN and also go to new and higher margin. Packaging solution innovation and customer experience will be the key to keep and maintain the customer. ESG and people also one of the key that make SCGP stand still today. Last but not least, for the key takeaway. This year, as Danaidej Ketsuwan mentioned, heading toward THB 150 billion for this year. Also last year, 2023, we can achieve a cost reduction, THB 1.1 billion. This year we also target that we can reduce the cost reduction again, THB 1 billion. This help to lessen and upside of the performance of the SCGP for this year.
In term of ESG, we still continue to achieve the greenhouse gas as our commitment and as our target. We wish that we can achieve this target earlier than the plan. That's all for the update of the SCGP on the first quarter of year 2023 and the whole year of 2023.
We would like to thank all the participants for joining today virtual event, and we wish you all a prosperous year ahead and look forward to seeing you again in next quarter. Thank you, and sawadee kha.