Lafarge Malayan Cement warns of weak 4Q

Lafarge Malayan Cement warns of weak 4Q
05 December 2012

Lafarge Malayan Cement said it expects the fourth quarter to be weak as demand has been impacted by the rainy season.

At a briefing last Friday, the company said its recent unilateral price hike in August 2012 will be dampened somewhat by rebates and discounts. Analysts at CIMB Research had earlier expected the hike in prices to be the key driver in the second half of 2012, and underestimated the impact of the weather patterns on cement demand.

Operating costs over the next four quarters are expected to be stable, unless Malaysia's main energy provider Tenaga Nasional Bhd hikes electricity tariffs, which are reviewed every six months. However, the commissioning of Hume Industries 1.5Mta cement works is likely to trigger pricing pressure on the local industry in the medium-term.

Lafarge reported strong domestic demand over the first three quarters of 2012. Moving into next year, cement demand outlook remains positive and the four per cent growth in 2012 is likely to be repeated in 2013, thanks to Economic Transformation Programme jobs, CIMB notes.

Published under Cement News