Taiwan Cement Group sees earnings shrink in Q1

Taiwan Cement Group sees earnings shrink in Q1
Published: 06 May 2008

The rising prices of crude oil and coal have driven down operating gross profit margins for Taiwan Cement Group’s three major subsidiaries in the first quarter, including Taiwan Cement Corp., China Synthetic Rubber Corp (CSRS) and Taiwan Prosperity Chemical Corp.

Taiwan Cement Corp. even saw its first-quarter operating gross profit margin slid to below 10%, with such decline showing the group shouldered with harsh challenges after Leslie Koo took over the chairmanship five years ago. Koo is renowned for keeping an eagle-eye over the management of the group.

Rising coal prices internationally has pushed down Taiwan Cement Corp’s operating gross profit margin to 8.6% in the first quarter of this year from 13.8% the year earlier.

Coal accounting between 18% to 25% of the production costs for cement-with coal price having risen to NT$112 (US$3.7) per metric ton from last year’s NT$70 (US$2.31)-Taiwan Cement Corp.`s core-business operating profit margin has been slashed by between 10% and 12%.

The cement producer saw pretax earnings decline by 27.1% YoY to reach NT$1.4bn (US$46.35m) in the first quarter of this year.