China Resources Cement profit down by 44.4%

China Resources Cement (CRC) reported a 44.4 per cent loss in net profit attributable to shareholders last year to HK$2.32bn (US$299m).

In 2012, the firm's turnover rose 9.1 per cent from a year earlier to HK$25.35bn. The sales volume of cement and clinker surged by 26.5 per cent and 36 per cent, respectively. The average cement price, however, decreased 12.23 per cent to CNY324.3/t while clinker prices were down clinker 16.1 per cent to HK$257.1/t.

Looking ahead, Barclays says CR Cement's improved cost control trend in 2013 could be offset by relatively weaker cement prices in Guangdong and Guangxi compared with other regions in China due to the potential for new supply growth of 4-9 per cent for the two provinces in 2013.

CRC has been steadily climbing up the ranks of domestic capacity both through a series of acquisitions and the creation of new capacity. Last year, the company saw its cement and clinker capacities hit 73.9Mta and 50.2Mta, respectively. Going forward, assuming that there will not be any further acquisition, CRC expects cement and clinker capacities of 77.7Mta and 57.4Mta in 2013 which will then increase further to 87Mta and 64.6Mta by end-2014. By  the end of 2015, the group expects cement capacity to reach 89Mt and clinker capacity to 66.2Mta.