Shanshui Cement announces 2013 gross profits of US$617.7m

Shanshui Cement announces 2013 gross profits of US$617.7m
Published: 24 March 2014


During the 12-months ended 31 December 2013, China Shanshui Cement Group Ltd’s revenue reached CNY16,535m (US$2667.85m). Gross profit was CNY3829m while profit from operations reached CNY2557m. Profit attributable to equity shareholders of the company was CNY1017m. Basic earnings per share reached CNY0.36. The Board recommended the payment of a final dividend of HKD0.092/share (US$0.01/share) for the year ended 31 December 2013.

Mr Zhang Bin, chairman and general manager of Shanshui Cement, said: “In 2013, the cement price in Shandong region was lower than that of 2012, while the cement price in northeast region was fluctuating at high levels. As a result, the group’s cement price declined and affected overall profitability. However, the group speeded up the development of its core cement business while accelerating vertical expansion on the industrial product chain, improving, refining fundamental internal management and enhancing the quality of production, operation and keeping sustainable profitability.”

China Shanshui Cement Group Ltd is the largest cement enterprise in Shandong and Liaoning provinces in China. During the reporting period, the sales volume of cement of the group increased YoY by 11.7 per cent to 53.42Mt, the sales volume of commercial clinker increased by 2.1 per cent to 9.22Mt, and the sales volume of concrete rose 72.4 per cent to 2.86Mm3. Sales volume of high-grade cement was 35.54Mt, representing a YoY increase of 20.5 per cent, and sales volume of low-grade cement was 17.88Mt, representing a YoY decrease of 2.4 per cent.

In 2013, the cement average unit selling price of the operating companies in Shandong region was CNY243.9/t, representing a YoY decrease of 9.1 per cent, that in northeast region was CNY270.3/t, representing a yYoY decline of 11 per cent, that in Shanxi area was CNY218.9/t, representing a YoY decrease of 8.8 per cent, and that in Xinjiang zone was CNY226.8/t, representing a YoY increase of 13.4 per cent. The operating companies in the Shandong region recorded sales revenue of CNY10,853m, accounting for 65.6 per cent of the group’s total sales revenue. The operating companies in the northeast region reported sales revenue of CNY4554m, accounting for 27.5 per cent of the group’s total sales revenue. The commencement of operations for operating companies in Shanxi and Xinjiang will make more contributions to the group’s sales revenue.

During the reporting period, the group added new cement production capacity of 4.56Mt and new clinker production capacity (including those under trial operation) of 6.4Mt. 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 232MW.

Furthermore, a number of clinker production lines and ancillary cement grinding production lines are currently under construction. With more new projects commencing operations, the group will further strengthen its control over and stand out in the cement markets in Shandong, Liaoning, Shanxi provinces, eastern Inner Mongolia and Kashi region of Xinjiang.

The group continued to improve its cost control. During the period, the proportion of raw materials costs to revenue was 25.5 per cent, an increase of two percentage points over 2012. The group’s average unit purchase price of coal in 2013 decreased by 11.8 per cent to CNY573.9/t compared with 2012. The proportion of coal costs to revenue was 20.1 per cent, a decrease of 1.7 percentage points compared with 2012. Output of residual heat power generation was 1105m kWh in 2013, thus reducing the cost of clinker by CNY453m.