Taiwan cement company dividend boost

Taiwan cement company dividend boost
Published: 24 March 2004

Thanks to the surge of cement prices and the contribution of invested subsidiaries in mainland China, Taiwan’s listed cement firms posted substantial profit growth last year and will distribute handsome dividends this year.  Asia Cement Corp. will deal out NT$1.3 (US$0.03 at US$1:NT$33.3) in dividend per share, half in stock and half in cash, this year, hitting the highest record in three years and outnumbering rival domestic cement firms. Universal Cement Corp. will see per-share-dividend top NT$1.2 (US$0.03) this year. Chia Hsin Cement Corp. is expected to dole out NT$0.5 (US$0.01) in dividend per share this year, breaking the record of no dividend distribution for a few consecutive years.  Asia Cement estimated it posted NT$3.46 billion (US$103.9 million) in pretax earnings last year. The company said its investment in a cement plant located in mainland’s Jiangxi Province will contribute earnings of NT$800 million (US$24.02 million) this year, double that of last year. An institutional investor predicted Asia Cement will see pretax earnings break the NT$4 billion (US$120.12 million) mark this year and will give more handsome dividend next year.

With the contribution of NT$2 billion (US$60.06 million) in profits generated by its Hoping power plant, Taiwan Cement said it gained over NT$2.2 billion (US$66.06 million) in overall profits last year, up sixfold from the previous year.  It is expected Taiwan Cement will distribute NT$0.5 (US$0.01) in dividend per share this year. The dividend will be given in the form of cash because the company just obtained a fresh fund of US$280 million by issuing euro convertible bonds.  Recently Taiwan Cement has clarified the rumor that domestic cement price will be further raised sometime in the second quarter of this year. The company said it will maintain the wholesale price of NT$2,250 (US$67.56) per metric ton that was announced at the beginning of this year.

Chia Hsin Cement said it gained over NT$500 million (US$15.01 million) last year from investments in mainland’s Jiangsu Province-based Jingyang Cement Co. Chia Hsin earned NT$800 million (US$24.02 million) in overall profits, or NT$1 (US$0.03) in earnings per share, last year.

Thanks to the disposal of shareholding in Grand Commercial Bank, Universal Cement posted NT$557 million (US$16.72 million) in profit last year, hitting historic high record. The company is expected to distribute dividends of between NT$1 and NT$1.2 per share this year. As the company is scheduled to break ground for the Guangdong Province-based Huizhou cement plant this month, the company will dispatch the dividend in the form of stocks and reserve cashes to support mainland investments.

Almost all domestic listed cement firms are stepping up investments in mainland. Asia Cement will invest US$200 million to set up third and fourth kilns at its Jiangxi-based cement plant. The company said the completion of the two kilns will help its Jiangxi plant boost annual output to eight million metric tons from present four million. The company has resolved to launch heavy investment in the mainland by setting up five cement plants, each in the provinces of Jiangxi, Hubei, Sichuan, Zhejiang, and Fujian, in the next decade.  Taiwan Cement is planning to establish a second kiln at its Guangdong-based Yingde cement plant ahead of original schedule. The company will invest NT$10 billion (US$300.3 million) to establish the Yingde plant. At the end of February, the company has begun establishment of the first and second kilns at the Yingde plant. The plant is expected to launch pilot production with annual output of three million metric tons sometime in the fourth quarter of next year.  Chia Hsin Cement will allot NT$300 million (US$9 million) to set up a power generation system in its Jiangyang cement plant by utilizing the heat produced in the cement production process.