According to local news reports, Holcim is soon get a controlling right in China’s Huaxin Cement, which has just posted a 155.8% increase in net profit for the first nine months of 2006.
Huaxin, based in the central province of Hubei, in March agreed to issue new shares to Holchin BV, a wholly subsidiary of Holcim, adding the total number of shares to 245.76 million, or a 50.32 per cent stake.
The plan is said to have been approved by the Ministry of Commerce, one of the first-batch approvals in China which allow foreigners to get controlling rights in state-owned large enterprises. Still, it has to receive the nod from China Securities Regulatory Commission.
The Swiss buyer will complete the acquisition work in November, securities analysts predict, and the price for each share to be sold through the private placement would be CNY 6.8 to CNY 7.
Huaxin’s income from the main business in the third quarter hit CNY 912m, up 26.9 percent from the comparable period of last year, the company said in a filing to the exchange. Operating profit jumped 46.9 percent to CNY 191m, of which CNY 41.6 million was net profit.
In the first three quarters, Huaxin’s top line was roughly CNY 2.4 billion, up 34 percent over the same period of last year. But the bottom line increased 155.8 percent to CNY 88.2m.
Cement and clinker output in January to September reached 11.2Mt, up 26.5 per cent. The average sales price was CNY 209.7 per ton, up CNY 16.7.
The company forecast a strong performance for the full year of 2006. Net profit is expected to rise at least 50 percent from the previous year’s CNY 62m.