New assets help Anhui Conch net jump

New assets help Anhui Conch net jump
Published: 23 August 2006

Anhui Conch Cement, China’s biggest cement producer, said first-half net profit soared 457 per cent over the same period the previous year thanks to newly acquired assets which boosted its output volume and profitability. Net profit hit 509 million yuan (HK$495.55 million), or 0.41 yuan per share, for the first six months ended June 30, compared to 91.4 million yuan, or 0.07 yuan a share last year, the company said in a statement to the Hong Kong stock exchange Tuesday. Revenues rose 48.5 percent to 6.7 billion yuan. The Anhui-based company purchased two assets last year to expand its footprint in the southern part of China.

Earlier this year, Anhui Conch said it expected cement sales to increase by 23 percent to 70 million tonnes this year, although prices have remained low for the past two years amid fierce competition. Anhui Conch is set to acquire more assets from its parent, Conch Holdings, to further boost profitability.

Under the mainland’s 11th Five Year Plan, the number of domestic building-material makers should drop to 3,500 by 2011, from 5,100 at the end of 2005. Anhui Conch announced last month that it will buy several assets, including construction materials, packing materials and plastic products businesses from its parent and an affiliate for a total of 4.1 billion yuan. To pay for the assets, Anhui Conch plans to issue to Conch Holdings 22.76 million A shares in the listed company at a price of 13.30 yuan per share.