Taiheiyo quarterly profit seen rising on higher demand
Japan’s leading cement producer Taiheiyo Cement is expected to report consolidated operating profit of about JPY1bn for the three months ended 30 June 2012, according to a Nikkei report. This would be the company’s first April-June operating profit in five years. Last year the company posted an operating loss of JPY1.2bn in the same perios of last year.
Taiheiyo Cement shuts down its kilns during the Golden Week holidays in May each year for maintenance which drags down on earnings for the quarter. However, this year repair and other costs were offset by a increased cement sales which has been brisk on the back of demand for office and condominium construction in greater Tokyo and earthquake reconstruction projects. Overall, sales likely grew about six per cent to roughly JPY175bn and domestic sales are seen rising about seven per cent.
The firm’s overseas cement business also appears to be doing well on growth on Asian markets including Vietnam and the Philippines. US operations continue to be in the red but sales volumes and prices are expected to have improved over the same period of the previous year.
For the full fiscal year to March 2013, sales are projected to edge up to JPY728bn and operating profit is seen rising 23 per cent to JPY36bn. However, the company may beat these forecasts as domestic cement sales remain strong with its six Japanese factories continuing to run almost at full capacity.