West China Cement profit edges ahead

West China Cement profit edges ahead
Published: 21 March 2014


West China Cement reported a 3.6 per cent YoY rise in pre-tax profit to CNY475.08m (US$76.4m) for the year ending 31 December 2013, compared to CNY458.58m a year ago.
 
Net income attributable to shareholders rose to CNY378.32m from CNY364.88m. Earnings per share were on a par with last year at CNY0.883. Revenue increased by 18.3 per cent to CNY4.17bn from CNY3.52bn in 2012.
 
Cement sales volumes rose by 23.1 per cent last year to approximately 17.6Mt for the year from approximately 14.3Mt in the previous year.

In northwest China, where a tough operating environment has prevailed since the second half of 2011, some respite was seen in 1H13 with relative stability returning to the market. In the second half of the year, however, the low summer season and the additions of new supplies in central Shaanxi Province resulted in cement price volatility. Prices improved in the fourth quarter as demand picked up at the end of the year. While the group’s average selling price in 2013 was lower at CNY228/t than 2012 (mainly due to lower pricing in 3Q13), the group ended the year with pricing levels broadly in line with those established in 2012 and 1H13.
 
The company's cement capacity as at year-end remained at 23.7Mt. While no capacity expansions were undertaken during the year, sales volumes rose in 2013 due to acquisition and capacity expansions completed in 2012.
 
Two brownfield plants are currently being built, both with planned capacities of 1.5Mta and scheduled for completion in 2H14. The projects are situated in Xinjiang province and Ghuizhou province and will lift group capacity to 27Mt in 2015 once finished.
 
In the first quarter of last year, WCC became one of the first private companies in China to obtain a quota to issue a Medium-Term Note (MTN) with the first tranche of CNY800m issued on 28 March 2013. The proceeds of this debt issue have been used to provide working capital and repay a significant amount of the group’s short-term bank loans.