Lafarge Malayan Cement Bhd’s annual pre-tax profit has plummeted 71.7 per cent due to sharply lower domestic selling prices in the first half of the year.
Higher production costs as a result of surging oil prices have also trimmed group pre-tax profit to RM29.345 million (US$7.9m) for the 12 months ended 31 December 2005 compared with RM103.693m for the previous year.
"The recovery in domestic cement selling prices since the 3rd quarter of 2005 enabled the Group to return to profitability for the year but was not sufficient to fully compensate for the significant loss in contributions during the intense competition in the first half year," it said in a filing to Bursa Malaysia on Feb 23.
Group revenue for the current year rose six per cent to RM1,866.668m.
For the fourth quarter, Lafarge booked group pre-tax profit of RM55.582m, up 86.6 per cent year-on-year due to higher domestic cement selling prices which was offset by higher production costs due to firmer fuel prices.
Revenue climbed 16.7 per cent YoY to RM507.376.
"With the launch of the 9th Malaysia Plan, construction activities could improve in 2006 and bring a small growth in cement demand in Malaysia," Lafarge said.
It also expects construction activities in Singapore to improve but market condition is likely to remain competitive.
While there will be pressure on some cost components to increase, export prices are improving and the stable cement market condition in Malaysia since July 2005 is likely to continue, it said.
"Against the above background, the Board is optimistic of a better year for the Group in 2006," it said.