Lafarge Malayan Cement Bhd has recorded a 53 per cent YoY jump in first quarter pre-tax profit to RM101.096m (US$28.7m) despite lower domestic cement sales and higher cost of fuel and other materials.
The group’s revenue for the three months ended 31 March 2009 increased nine per cent to RM609.411m from RM559.607m for the same period a year ago mainly due to the impact of higher cement export, better domestic and export selling prices.
"In addition to favourable contracted prices, the higher export selling prices were also boosted by the much stronger US dollar during the quarter," Lafarge said in a filing to Bursa Malaysia on May 27.
It attributed the better earnings to higher revenue, lower maintenance costs due to timing of scheduled plant shutdown and improved plant performance.
In addition, the operating margin in the corresponding quarter in 2008 was lower as the Group had to absorb the higher cost of fuel and other materials before the price control was lifted in June 2008, it said.
The company’s earnings per share increased to 10.80 sen from 7.30 sen a year before.
Lafarge said the group’s financial performance is very much dependent on the performance of the Malaysian economy and the domestic construction industry.
Although the industry is expected to suffer from a contraction in domestic cement demand, the economic stimulus packages being rolled out by the Malaysian government will hopefully hasten the recovery of the economy and demand for building materials, it said.
It said the group’s financial results for the current quarter were boosted by better export prices and the stronger US dollar but export earnings is likely to decline in subsequent quarters as export prices have started to ease.
The group will, however, continue to focus its efforts in improving plant performance, cost control and management of working capital to mitigate the negative impacts of the slowing economy.