Good year for China Resources Cement

Byyyp

Updated Wed, 12 Mar 2014 00:00:00 GMT

The board of directors of China Resources Cement Holdings Limited has announced the audited consolidated results of the Company and its subsidiaries for the year ended 31 December 2013.

2013 highlights

Turnover increased by 15.8% y/y to HK$29.34 billion, from HK$25.35 billion in 2012.
Gross profit stood at HK$8.36 billion in 2013, against HK$6.1 billion in 2012.
Net profit for 2013 totalled HK$3.34 billion, a 43.6% y/y increase from $HK2.32 billion in 2012.
Earnings per share rose to HK$0.512, compared to HK$0.357 in 2012.
Total assets increased by 3.9% y/y to HK$54.18 billion, from HK$52.16 billion in 2012.
Acquisitions
On 2 January 2013, the company approved the acquisition from six independent third parties of 100% equity interests in Hainan Wuzhishan Dajiangnan Cement Limited at the total consideration of RMB54.9 million (equivalent to approximately HK$69.2 million). Hainan Wuzhishan Dajiangnan Cement Limited operates a cement grinding line with an annual production capacity of 600 000 t in Maoyang Town, Hainan. The acquisition was completed on 29 September 2013.

New projects
On 25 February 2013, the company entered into a framework agreement with Zhihai Group Company Limited for the proposed establishment of a joint venture company, which intends to acquire certain concrete and cement assets located in Southern China and Shanxi that are currently owned by Zhihai Group Company Limited.
On 30 September 2013, China Resources Cement entered into a capital contribution agreement with Fujian Energy Group Company Limited to establish a strategic cooperative platform to jointly develop and expand the cement and concrete business in Fujian. Fujian Energy Group indirectly owns the entire interest of Fujian Building Material (Holdings) Company Limited, which holds various assets and business entities in Fujian.
New cement plants
During 2013, the company completed the construction of a 4500 tpd clinker production line and two cement grinding lines at Changzhi, Shanxi, which increased its total annual clinker and cement production capacities by 1.4 million t and 2 million t, respectively, and five concrete batching plants, which increased total annual concrete production capacity by 2.9 million m3. However, as the two 1200 tpd clinker production lines in Shanxi will probably not comply with the new environmental emission standards, the company decided to cease operation of these two lines (and the related annual cement production capacity of 1 million tpa).

Cement industry in 2013
In 2013, China maintained stable economic growth and demand for cement in China continued to grow. According to the National Bureau of Statistics, total cement production increased by 9.6% y/y, reaching 2410 million t.

Throughout the year China maintained strict control on capacity expansion and continued the task of eliminating obsolete capacity, both of which played an important role in the improvement of the demand and supply dynamics of the cement industry.