Asia Cement (China) earnings surge

Asia Cement (China) earnings surge
30 April 2014

Asia Cement (China) said its profit attributable to owners for the first three months of 2014 was 13.73 times higher YoY at CNY127.7m (US$20.4m). Revenue rose to CNY1.6bn, an increase of 20.6 per cent from a year earlier. The leap in the group’s earnings for the period was mainly attributable to an increase in average selling prices and a decrease in cost of coal over the same period last year, the company said in a statement.

During the period the group sold 5.29Mt of cement and clinker, up two per cent YoY, while cement prices rose "significantly" against the comparative period of 2013, the group added. With a decrease in the cost of coal during the period, gross profit rose by 165 per cent o CNY385m and the gross profit margin was 24 per cent, an increase of 13 percentage points compared to 1Q13.

Asia Cement (China) expects cement demand to increase by 6-8 per cent this year. With improved weather conditions in the second quarter, the company expects higher levels of consumption to help push up prices which are expected to stabilise at higher levels as the effect of the State's policy to address overcapacity begins to be felt in the 3Q14.

“The group will actively push ahead with various merger and acquisition and cooperation plans, and accelerate the construction of silos in Taizhou, to ensure that they can be put into operation in the
fourth quarter of 2014 as scheduled,” Hsu Shu-tong, chairman of the company, said.

Asia Cement (China) currently has a total of 13 dry-process cement production lines with a capacity of 30Mta. Upon the completion of the acquisition of Sichuan Lanfeng Cement Co, Ltd, announced in mid-April, the group’s production capacity will increase to 35Mta. Asia Cement (China) targets 40Mta and 50Mta of production capaicty by 2015 and 2016, respectively.

Published under Cement News