Anhui Conch profit increase

Anhui Conch profit increase
Published: 23 March 2005

Anhui Conch Cement Co., China’s dominant cement producer, reported a 29 per cent rise in its 2004 net profit, buoyed by strong demand. Anhui Conch posted net profit of 960.9 million yuan (US$116.1m) for the year, up from 743.4 million yuan in 2003. Revenue rose to 8.33 billion yuan from 5.65 billion yuan. A major supplier of high-grade cement to fast-developing southern and eastern China, Anhui Conch benefited from high demand from infrastructure projects and high prices last year. But competitors in the fragmented cement market have built a slew of new plants, causing a supply glut and a sharp drop in prices. Ahead of the results’ release, securities firm Guotai Junan warned the company’s gross margin faced a challenge from falling cement prices and rising costs. Anhui Conch shares have fallen 30 per cent in the past six months and have dropped 10 per cent so far this year. The company has a share listing in Hong Kong.