(Hong Kong, 11 August 2013) – China Resources Cement Holdings Limited ("China Resources Cement" or the "Company", SEHK stock code: 1313), one of the leading cement and concrete producers in Southern China, announced its unaudited interim results for the six months ended 30 June 2013 (the "Period").
During the Period, the Company's consolidated turnover rose 16.5% to HK$12.9 billion compared with the corresponding period last year. Profit attributable to owners of the Company achieved a growth of 80.4% year-on-year to HK$1.15 billion. Consolidated gross margin grew 2.3 ppt year-on-year from 20.8% to 23.1% due to a decrease in the production costs of cement products. Basic earnings per share reached HK$0.176. The Board has resolved to declare the payment of an interim dividend of HK$0.035 per share for the six months ended 30 June 2013 (1H 2012: Nil).
Mr. Zhou Longshan, Chairman and Executive Director of China Resources Cement, said, "In the first half of 2013, China achieved a steady economic growth despite uncertain recovery of overseas market. FAI remained the key driver of economic growth. The stable development of railway, highway and waterway infrastructure and real estate market continuously drove for the demand for cement products. With the Chinese government's encouragement and promotion, mergers and acquisitions and restructuring are expected to accelerate the market concentration in the cement industry. Optimal resource allocation and sustainable growth will be the key tasks for cement industry development going forward. We continued to optimize coal procurement through centralization, expand sales channel and improve production and logistic cost control. Through the increased utilization and improved sales volume, we have further enhanced our market share in our operating regions during the Period and further strengthened our leading position in our operating region."
According to the National Bureau of Statistics, in the first half of year 2013, the total cement production reached 1.1 billion tons, representing an increase of 9.7% over the corresponding period last year. New clinker production capacity decreased 53.2% year-on-year to 38.8 million tons. The new capacity was mainly located in the western regions such as Xinjiang, Sichuan, Gansu and Guizhou. Among them, there were only 7 production lines released in Southern China, increasing clinker production capacity by 8.2 million tons, representing a decrease of 61.6% year-on-year. In addition, the Ministry of Industry and Information Technology issued the tasks of eliminating obsolete capacities of the cement industry, with the target of 92.8 million tons cement capacity to be eliminated. The effective implementation of obsolete capacity elimination and strict approval on new capacity will control net capacity addition, improve supply and demand dynamics, resulting in better business environment of the cement industry.
The steady growth of FAI, coupled higher utilization rates enabled the Company’s external sales volume of cement, clinker and concrete increased by 7.4 million tons, 0.5 million tons and 1.0 million cubic meters, representing year-on-year increases of 32.2%, 11.6% and 17.4% respectively. Turnover of cement, clinker and concrete reached HK$9.1 billion, HK$1.1 billion and HK$2.6 billion respectively. The average selling prices of cement, clinker and concrete were HK$300.3 per ton, HK$235.2 per ton and HK$376.5 per cubic meter, representing a year-on-year decrease of 10.1%, a decrease of 13.0% and an increase of 1.2% respectively. The decreases in average selling prices of cement and clinker reflected the more competitive market situation as new capacities have been released into the market since 2012. However, it is expected that the new production capacities to be released will diminish and more obsolete capacity will be eliminated, the competition will be eased and the average selling prices will be increased gradually in the future. The selling prices of concrete were relatively stable throughout the Period.
