We are very pleased to welcome all of you again to SCGP Analyst Conference. Today we will cover the performance of the first months and also the third quarter of 2023. I am Vikorn from the IR team, and I will be your host this afternoon. As usual, before we proceed, may I remind you to keep your microphone on mute for the time being. We will start with the presentation from our management. As usual, we will follow by the live virtual Q&A session right after. Without further delay, may I introduce the two gentlemen. Our presenter, SCGP CEO, Khun Wichan Jitpukdee, and SCGP CFO, Khun Danaidej Ketsuwan. Thank you.
Good afternoon, and [Non-English content] . Time flies so fast. We meet again in the third quarter analyst conference. Before we start, I would like to thank all of you that participate in the IAA, Investment Analysts Association, voting for the CEO, CFO, and the IR Outstanding Award. We are confident that this award will give some type of motivation to the company that constantly communicate and constantly disclose all the information for the better of the stakeholder, even good or bad news. Thank you very much for the voting in the past. In terms of the past performance in the past nine months, the year-to-date revenue, especially revenue EBITDA and profit, a little lower due to the lower packaging paper price and volume. However, in terms of the consumer and fiber packaging, still deliver very resilient profitability.
In summary, the revenues are nine months, THB 97 billion, which reduced 13% from the same period of last year, while the cost of goods sold reduced 1% to 82%. In terms of the core EBITDA, this is THB 13.2 billion, which reduced 15% from last year. However, the EBITDA margin still maintain at 14%. For the core profit at THB 3.9 billion, which reduced from the same period of last year to 24%, and the profit margin down from 5% to 4% of profit margin. As mentioned, this is mainly due to the packaging paper in terms of price and volume, especially for the export volume. In terms of the business segmentation, integrated packaging chain, this account for 75% of the total sale.
This IPB business, the margin improve, actually is from the cost reduction by our efforts and also the cost of raw material and energy cost. You see here the nine months EBITDA, THB 10.9 billion, reduced 10% from the same period of last year. However, the EBITDA margin for the integrated packaging business improved from 13% to 15%. For fiber business, this is account for 19% of the total sale. Revenue on sale has been decreased due to the price. However, the EBITDA down to THB 2.8 billion, which lead to the EBITDA margin down to 15%. Even the top line expansion growing. In fact, the top line going come from the food service packaging that we export to Europe. However, the profit and EBITDA effect from the lower of the pulp price.
In terms of the business portfolio in nine months, starting from the left side by revenues from sale by business unit. You can see here the dark blue color packaging paper has been down from 45% to 39%. As mentioned earlier, this is because of the selling price and also the export volume is down. This led to the packaging paper down from 45% to 39%. In terms of downstream polymer packaging and the fiber packaging, 12% plus 24% combined to 36%. Packaging paper 39% and the downstream 30%. This is quite balanced in terms of the upstream and downstream. For the fiber is 19% and solid recycling at, for revenue this year, 6%.
In terms of the revenue by the end destination, you see here in Thailand now it is increased from 41% to 42% because of Thailand still maintains and the domestic is quite good. In the contrary of that, Indonesia has been reduced from 19% to 14%. This is because of selling price of the Indonesia, which I have prepared one slide later. In next two slides, we will explain for the Indonesia industry. The rest is the rest of the world, meaning the export. This export comes to two portions. The first portion is coming from the food service packaging, as mentioned, from the fiber business. Another is from the Peute Recycling, which we ship the OCC from Europe to India market. This has helped improve the export.
In terms of the consumer link still maintaining at 70% in terms of the food, beverage, FMCG, and also electronic and electrical appliance. Coming back to Indonesia market situation. As mentioned, we met last time. We see that Fajar continues to be a key asset of the SCGP. However, we share this information for the packaging paper industry in Indonesia. Indonesia packaging paper market is the 75% they sell in domestic and 25% sell to export. And the export, 90% of this portion is going to China. So which the export to China has been down from the economic slowdown in China, which slower and recover lower than our expected. And also the player in the Indonesia, they are prioritizing the high utilization rate. This is a lead to a tight competition.
You see in the graph here, after the China economic has weakened, starting from the third quarter from last year, the selling price in the Indonesia has been dropped sharply. This has made the very tight competition. We see that the bottom point of the price had been passed, and we see the signal both in terms of the price of the export paper to China has been adjusted, increased up, and also the domestic price has been improved, in this quarter. However, the rate of the price increase of the domestic still slower than when the price dropped in the start from the third quarter from last year. And the raw material, we see that this continues to reduce also in terms of rate and also energy cost. This is aligned in terms of the alignment with the ASEAN regional.
We see also our food and beverage, FMCG, in the past quarter and continue to this quarter. This consumption remain growth from our point of view. In term of the medium-term opportunity, we see the demand growth has been improved start from this quarter, especially for the consumer link. That's why this has happened because of the government, they invest a lot of, especially in the investment in infrastructure. As we know that in the last few weeks ago, the Indonesian government, they start to announce the first high-speed train from Jakarta to Bandung, and this improved GDP by the infrastructure. In the very short term, in next year, we see the general election will be the positive in term of the consumer and the consumption of the FMCG.
The expected of the mid and long term of the GDP Indonesia is lovely on all five, and we see that the service sector in the GDP has been improved in Indonesia also in the past 10 year. In term of the SCGP strategy, of course, we start from our internal effort, the operational excellence along the supply chain. This time, we start to use the AI to save the energy cost in Thailand, and then we share with you later in the later part. We also expand for the food and beverage into the consumer link, which we have to enter into the MNC company, MNC customer, which we use the connection from Thailand. In the end, enhance the indication level to augment the margin and price discipline. So this is a way to educate the market, to improve the margin and the price discipline.
In term of the macro economy and the update, we see that in term of the global, the improvement in the inflation, meaning inflation start to decline. We hope that the interest rate also will be a decline in the future also. Supply chain start to normalize. However, the effect, as you know, that Israel and the Palestine in the Gaza area are still unclear. There'd be effect in short. In term of the ASEAN, we see the tourism increased to 25% before the pre-COVID. We see that the incident in the shopping mall in the center of Bangkok will be effect in the short period of time. In term of China, we see the manufacturing index slightly recover in the third quarter and confident that it will be continue to be the fourth quarter. Packaging paper into China, at least 90% of the pre-lockdown of the COVID.
This is show a good sign. Also the pressure in term of the price still remain here because of still over capacity in the ASEAN area. So that the update in term of the nine months and the Indonesia and also macro update. Next will be the update in term of the third quarter. May I pass to Danaidej.
Okay. Let's first look at the situation in the key markets. Actually, this is the first time in many quarters that we see more green than red in the arrows. That is a good momentum here. You can see that in all the major markets, the third quarter is actually internal demand, better than the second quarter. And that is actually also true for Thailand, but here we put it as a flat because during the first quarter, there was a Buddhist Lent period in which the alcohol beverage and the demand related to that segment was slightly down. So overall it is flat. But in fact, if you take that out, Thailand also have a QoQ growth. So if you look into it, the major economies, Thailand, Vietnam, Indonesia, and the Philippines and Malaysia also all in a positive territory in term of QoQ growth.
That is a good news. Another good news is that in term of year-on-year, we also have a positive growth improvement in Thailand and Vietnam. And this is for many quarters, we observed that the year-on-year was still a down period, but this is the first time that we have also the third quarter recovered from the period of last year. And if you look at it starting from the more connected to the consumer part, which is the fiber packaging and polymer packaging, you can see it is quite evident that the improvement in the quarter-on-quarter was from the more consumer-related segments such as F&B and also the FMCG consumer goods. This is from the recovery in the domestic consumptions, partly also related to the increasing tourism in the countries and also in preparation for the year-end festive season in these countries.
Some segment of the exports are also growing, for example, frozen and processed food and rice export, for example. Some segments still remain soft. For example, the E&E and also automotive parts. This part is still for the durable goods are still soft. Now moving a bit upstream to the packaging paper. The domestic demands are still growing, even in Indonesia or in Vietnam. This part are also growing. But when we look at the overall, there is a contraction in term of the export of packaging paper outside the region. And this is because all the regional price in China that Wichan talked about, this also suppress the price and also the volume flowing out to those areas. So with the excess supply in the situation leads to the more competition in the ASEAN region for packaging paper, particularly in Indonesia. Moving on to food service packaging.
We see on the positive side, both on the retail sales, like paper cup or plates, and this is in line with the growing sales in the Northern Hemisphere. When there is a summer period, people went outdoor more and having more picnics or parties and the consumption of these kind of products are actually improving in the third quarter. Back to the other segment, which is the QSR or fast food. We also see some improvement, and this is particularly in Asia and in Southeast Asia where we have our operations. So we observe the increase also in term of demand for this group. So overall, in fact, we would see that there is more positive than negative.
Another point that we need to still pay attention would be in Europe, in which the economy will still remain quite weak from the still inflations and high energy price that cut down on the spending power of the consumers. That's the part in term of market. Moving next to the financials for our operations in the third quarter. You can see that in term of revenue, it's locked in at THB 31.5 billion, a slight drop QoQ of 2%. The volumes is actually going up except for the part where there's an export out of Fajar and also on the pulp line. But other than that volume increase QoQ. Price however, have softened a little bit. So together with the volume and price, we have a slight reduction in term of revenue.
For core EBITDA, it's THB 4.2 billion and that's a 9% decline QoQ, which is in line with revenue. When we have a price decline, EBITDA also decline, but the main effect will be from the pulp operations. So in term of margin, core EBITDA margin dropped by 1% from 14% to 13%. Likewise, for core profits also dropped 9% QoQ with the same reason as the EBITDA drop. Our net profit lock in at THB 1.325 billion. So now if you look into different chains, starting with the integrated packaging business, the revenue for this part is THB 23.5 billion, a drop of 19% year-on-year. That's mainly from the price of packaging paper. For QoQ, the drop was 2%, which is in line with the overall picture of the company. The positive parts still come from the downstream with the polymer packaging.
We have a growth in term of QoQ based on the F&B segment, as well as different type of food like processed food and instant food. Export on some segment is also growing. And same picture for the fiber packaging. They have strong in canned food and frozen food which actually give this two business on the downstream side a positive note. For packaging paper, in fact, the domestic volume also grow in every market, Thailand, Indonesia, Vietnam, and the Philippines. The domestic sales are up. But because of the export volume was down, and also the price factor was down, so this was the part that went into the reduction in the revenue of this integrated packaging business. When we look at EBITDA year-on-year dropped by about 7%.
Now it's about THB 3.6 billion, and that's also mainly from the price factor, from the packaging paper. But if you look at the QoQ, we have a flat QoQ of THB 3.6 million. And also, the margin was able to preserve at about 15% level. This is due to the increase in term of the volume of the downstream products, coupled with the better cost position, whether it's from key raw material like recovered paper or energy cost has been coming down in the third quarter. And also our efforts in term of the operation excellence and also cost-saving projects, that contribute to also cost reduction. So with that, with the declining price and some effect on volume, we were able to preserve the margin because of the cost position was better. Next would be on the fibers business.
For fibers, revenue was THB 6.2 billion, which is flat year-on-year. On the pulp side, it was down, but it was offset by the positive side on the paper part. If you look at the QoQ, there was a negative growth or decline by about 3%. Food service actually better and improving QoQ in term of the volume, like I mentioned before, the QSR part and also the retail part, that was for the summer season, really accelerate the volume that we can sell overseas. For paper part, the volume is actually up because of the school opening and other specialty papers that would be able to sell more. On the pulp side, there was a decline in term of the volume and also in term of price of dissolving pulp.
Because we also take the annual maintenance activities into Q3, the volume of pulp is actually down by about 13% QoQ. EBITDA was down both year-on-year and QoQ. The major impact would be on the pulp price as well as on the maintenance activity that was done in the third quarter. That's the operation part. Next, I want to move on the financial part review, starting from the nine months comparing revenue with and without M&A that we have done. If we exclude M&A, our revenue will be about THB 82 billion for the nine months. That's a drop by about 16%. With M&A, M&A would be including company like Duy Tan, Intan, Deltalab, Peute, and Jordan. That contributes some additional revenue, so the drop would be 13% instead. EBITDA dropped by about 17% or 16%, quite similar.
If you look at the M&A margin excluding the recycling business, which normally yields quite a low margin in that business. The nine-month period, the margin of M&A excluding recycling would be 16% for this year, which is better than 14% of last year. If you look at the net profit and core profits, it's actually minimal adjustments. We have some gain on FX and offset by other costs. Our core profit was THB 1.3 billion, and also same as the net profit. No special adjustment here. Moving on to the balance sheet. Our net debt is at THB 32.5 billion, which is down from the end of last year. Our net debt to EBITDA remained at about 1.9 x under 2x . Our debt to equity ratio is 0.9x , which is the same as last quarter.
We have cash at the end of September, cash under management of about THB 15.5 billion, with the interest-bearing debt of THB 49 billion. The average cost of debt for nine months was 4.1%. This is actually our cost of debt range between 4% and 4.2% during all the three quarters of this year. It's lower in Thailand. The cost of debt in Thailand for us is lower than 3%, whereas for the overseas part, because of higher interest rate environment in Vietnam, Indonesia, and the Philippines, which is roughly between 5% and 6% there. That's why our average cost of debt is about 4%. We also recently conclude THB 3 billion of green loan with Krungsri Bank, and that is used to expedite our ESG projects.
The loan will be specific for the funding of projects, which include renewable energies like biomass or solar, as well as efficiency improvement projects and water management projects. That is a new one. We try to get a competitive interest rate for this kind of ESG-related projects. On CapEx, the nine months CapEx was THB 5.3 billion, which is quite low compared to the other years. But you can see that in term of the maintenance and efficiency, this was about at the same level. The drop come from the expansion of growth CapEx. The two reason for that, for the first nine months, we have not dispersed the M&A CapEx. That will be for our disbursement in the fourth quarter. I will talk about in the next slides. Also some of the expansion project, particularly the bigger one like the North Vietnam project was delayed.
The disbursement in relation to this project was not happening in this year as planned. That is why we actually have a CapEx number of THB 5.3 billion against our budget. I would like to move next on the business update, starting with the projects, which is related to the CapEx we just talked about. We continue to grow with both programs in terms of our programmatic M&As as well as on organic expansion. We try to separate it into the motivation for this kind of growth. It is actually four key categories. One is to acquire new customers or to expand with the customers. The second one is to build our new capability or enhance our technology, our production capabilities. The third one will be to sort of streamline or optimize along our value chain by creating more optimization or backward-forward integration, that type of growth initiatives.
The last one will be on new business or some on innovation. On that front, we look at our organic expansion. One is on the flexible packaging in Thailand, which if you remember, we take some of the assets from Cyber Print earlier, and with that project, we also have some additional capacity also under construction. That was done and completed in the third quarter. That give us additional capacity of 5%, if we talk about the Thailand flexible packaging capacity. Another one is the expansion of the box business in Thailand, and this is still ongoing with expected completion as planned in the first quarter of next year. Another one is on the packaging with Peute Recycling, which is in the Netherlands.
Since we purchased Peute, they have also a plan to relocate operations from the current site to the new site, which is next to the Port of Rotterdam. That is being done, and they actually start to move in already this week. The benefit is that the capacity to handling the sorting capacity and also to do some other trading activities will be doubled from 1 million ton of RCP a year will be to 2 million tons. Also in term of cost advantage, because it is next to the Port of Rotterdam, we can reduce a lot of inland transportation costs. It is already completed and start to move in and will be completely operational within the first half of November. In term of M&A Star Print, we announced earlier, we talked about earlier, and this will be completed within November.
It's actually just waiting for the approval from the Antitrust Commission in Vietnam, which we don't expect any delay on that part. I also want to talk about two new M&As, which we believe we can close it within the next two weeks. One would be on the polymer packaging part. This is to enhance mainly the customers. The company we're talking about have access to global customers and also a way to expanding the channels and the network going to those customers and enhance the ability to become more of a solution provider also. So this is related to gaining more customer, more channels for the polymer packaging part. The second deal will be on the medical supply and labware, which would be an enhancement to Deltalab.
In this case, we tap into new products and also gain some new know-how on to do the manufacturing or the technology in some of the products that Deltalab will be able to sell to their customers. So these two projects, these two M&As are due to complete within the next two weeks, but the size of them are not very big. The rationale would be more in term of the enhancement of our capabilities. Next will be on operation excellence, which Wichan will talk about it.
Thank you very much, Danaidej. Those are for the update of the project and the future M&As. Now we come back into the internal effort in term of the operational excellence, which hint on the operational efficiency. This effect, we can make a cost saving this year, THB 130 million , due to we use the AI in the process of paper making, packaging paper making, and this help to reduce the steam consumption. How it start? We start from the left-hand side. We collect all the big data, more than five-year historical record in five group. Start from the operation efficiency, energy consumption, product quality, geo-optimization, and also raw material cost. By this big data, we use AI and the expert. Expert mean our data side, those who are well-trained. By this, we create the energy cost optimization platform on the right-hand side. There are mainly three component.
The first component is the control system. We call it new control, but actually it use the radar sensor. From radar sensor, it move to a remote data analytic. Then we use AI and also machine learning algorithm to calculate and to study from the past data, from the best data that we can do in term of energy. This can reduce the energy cost and reduce cost saving this year. So this effort, it took for almost three year, and it become successful this year since AI become commercialized. So for the success here, we implement only in Thailand, and we plan to expand into Vietnam, Indonesia, and the Philippine in next year. So this journey, it may take another two to three year to implement all the same that we have. Because each paper machine, they have different characteristic.
We have to collect historical data, then we put the AI and machine learning. Also in next step, we move from the energy cost saving to be in term of the raw material yield, because one of the major cost of making a packaging paper is the recycled paper. So this we can improve yield, we can reduce the cost, and also we can improve the quality optimization. That the efforts of use AI in term of the operational excellence and the effect can send to the bottom line of the company. This is another commitment to address the climate change. We announced that 2050, we achieve Net Zero, but that a bit far, that almost 27 years from now. In term of the shorter period, 2030, this is our target. We reduce 25% from the base year in 2020.
This 25%, we use the science-based target, or the SBTi. So this is the target from the science-based. Then when the time passed for three year until now, 2023, and we expected that end of this year, we can reduce the greenhouse gas by 15%. Actually, we plan 25% reduction in the year 2030. So the target and achievement is not far. It's become more reality. In fact, we set the target three year until this year, only 17.5%, but we can achieve 15.5%. The key achievement that we can reduce the greenhouse gas at this time, because of the efforts of the energy transition by using alternative fuel biomass. Those high of the biomass. So now the biomass using improved from 24% to 36%, and this help, at the end, reduce the coal consumption.
It's not only the effort that we address the climate change in term of the external organization that also rated us from the FTSE4Good. The score have been improved to 4.1, and the sustainability are maintained at low risk level. The NetherlandsThai Chamber of Commerce give us the award in term of the outstanding term of the corporate governance. This is the reputation and the good of the company. In summary, outlook and key takeaway start from internal. We see that the food and wellness segment in the regional start to pick up. So the operational excellence and the research development and innovation investment will be key to achieve that. In term for the raw material, we are so productive to manage that one, energy cost and also the synergy among the site and apply the AI to the regional, as I explained earlier.
In term of the expansion, as Danaidej already mentioned, the commercialization and ramp up the operational excellence, that will be also increased. In term of the external, we see that the Chinese tourists will temporarily have a pause due to the situation and the accident happened in the shopping mall in the heart of the Bangkok. We said that this is for happen in short term. We see also the domestic consumption will continue the key drive of the ASEAN economy. This will help improve the consumption yearly. In term of the inflation, we see that the interest rates start to stabilize, and this help improve the global trade. Last but not least, the packaging paper excess supply and over capacity in this region are still say that. So this need to manage. We see that the industry utilization rate had been rising also.
This aligns with the improvement in the demand. So at the end, the key takeaway we summarize that operational excellence by using the AI can improve the efficiency and investment in research development innovation also are the key. The second one is the road map and growth path to the ESG. This has become more reality, and this year we achieved the commitment of reduce the greenhouse gas better than planned. Last but not least, the project M&As Danaidej mentioned. We have two module, even it is not a big deal, but that can help to expand to the world-class customer, and of course, the setup will be finished in November. That is all for the presentation this time, Vikorn.
We would like to thank all the participants for joining our virtual event today, and we look forward to seeing you again in the next quarter. Thank you.