Chia Hsin Cement 1H Net +81% on strong prices

Hong Kong-listed Chia Hsin Cement Greater China Holdings Corp, one of the largest Taiwanese-owned cement makers operating in China, said its first-half net profit rose 81% from a year earlier, boosted by high cement prices and cost-control measures. Net profit for the six months ended June 30 totaled $12.3 million, up sharply from $6.8 million in the year-ago half. Revenue rose 25% to $44.1 million from $35.2 million.

 "There was strong demand in the first half for high-grade cement despite China’s austerity control measures," said Jason Chang, chief executive of Chia Hsin Cement. The company increased its proportion of high-grade cement to 80% of total output in the first six months, from 63% for the whole of 2003, he said.

In recent months, Beijing has taken steps to cool the overheating economy. This has heavily affected the construction sector, which in turn has damped demand for cement. Although cement prices fell heavily in May, Chang was pleased to note that prices have firmed since mid-July.

 "The market is picking up again. I think the price will continue to move upward for the rest of the year," he said. Despite the decline in May, Chia Hsin Cement said cement prices have risen around 30% in the first half from last year. "As a result, price increases are the biggest factor to our strong performance in the first half," said Elizabeth Wang, an executive director of Chia Hsin Cement.