China Shanshui revenues rise 42%, China

China Shanshui revenues rise 42%, China
Published: 26 March 2012

China Shanshui Cement Group which operates mainly in the Shandong and Liaoning Provinces in China, said sales growth of 42.2% to CNY16,862m for the 12 months ended 31 December 2011.

Gross profit surged by 99.2% to CNY5079m and profit attributable to equity shareholders of the Company soared 127.3% to CNY2225m. Basic earnings per share reached CNY0.79, up 125.7% compared with last year.

Commenting on the peformance, Zhang Bin, Vice Chairman and General Manager of Shanshui Cement, said: "In 2011, we were able to seize the opportunities brought about by the Government's supportive policy of increasing investments in infrastructure, accelerating the urbanisation and the construction in rural areas as well as restricting additional and eliminating obsolete cement production capacity. We have leveraged our integrated competitive strength in market presence, scale of operations and cost-effectiveness by adhering to a marketing strategy of 'clinker for profits and cement for market expansion'. Besides, the Group vigorously implemented overall budget management to further reduce costs and control expenditures, and achieved remarkable operating results."

For individual product segments, cement revenue amounted to CNY14,124m, a YoY growth of 52.3%, and clinker revenue amounted to CNY1887m, a YoY decrease of 2.8%. Concrete revenue amounted to RMB243m, a YoY growth of 30.6%.

The Group's average unit selling price of cement in the Shandong area was CNY299/t, a YoY rise of 25.6%, while that in Northeastern China was CNY282.7/t, a YoY climb of 25%, and the average unit selling price of cement in Shanxi was CNY298.3/t, down 5.3% YoY.

During the period the group added 18Mt of cement production capacity (including those under trial operation) and 6.4Mt of new clinker cement capacity. As at the end of the period, all suitable clinker production lines had been equipped with residual heat generation facilities, and the total installed capacity amounted to 182.5MW.

On the company's outlook, Mr Zhang said: "In 2012, under the basic tone of 'steady growth' in its macro-economic policies that set forth by the Government, the cement industry is expected to benefit from the strong demand driven by increasing urbanisation, and construction of infrastructure in new rural areas, affordable housing and water facilities. The restrictions on new capacity and more rapid elimination of obsolete production capacity should continue to optimise the balance of supply and demand within the industry. In our view, the vicious price competition will be substantially decreased as the industry further consolidates, and large enterprises will play a leading role in prices, making the industry more profitable."