HONG KONG, Aug. 26, 2013 /PRNewswire/ --
Financial Highlights (Unaudited)
| (RMB Million) | For the 6 months ended 30 June 2013 |
| Revenue | 7,069 |
| Gross profit | 1,602 |
| Profit from operations | 1,035 |
| Net Profit | 360 |
| Profit attributable to equity shareholders of the Company | 348 |
| Basic earnings per share (RMB) | 0.12 |
China Shanshui Cement Group Limited ("Shanshui Cement" or the "Group"; HKEx: 00691), the largest cement enterprise in Shandong and Liaoning Provinces in China, announced its unaudited interim results for the six months ended 30 June 2013, prepared in accordance with International Financial Reporting Standards.
During the review period, the Group's revenue reached RMB7,069 million. Profit from operations was RMB1,035 million. Gross profit was RMB1,602 million, the decrease was mainly due to the fall of selling prices. Profit attributable to equity shareholders of the Company was RMB348 million. Basic earnings per share reached RMB0.12. The Board did not recommend payment of an interim dividend for the six months ended 30 June 2013.
Mr. Zhang Bin, Chairman and General Manager of Shanshui Cement, said, "In the first half of 2013, China's economy has been remaining stable as a whole, but the economic environment has been getting more sophisticated. The growth of market demand within the cement industry slowed down as a result of the unfavorable macro-economic condition. The major profit-generating regions of Shanshui Group, Shandong Region and Northeast Region, suffered from the slowdown in growth of fixed asset investment as well as the fluctuations of national cement industry, in particular the impact of cement overcapacity of neighboring provinces. As a result, the cement price declined and affected the Group's profitability. However, while speeding up the development of its core cement business, the Group continued to improve and refine fundamental internal control, enhance the quality of production and operation, and get well-prepared for the in-depth expansion on the industrial product chain."
During the reporting period, the sales volume of cement of the Group increased year-on-year by 9.3% to 22.98 million tonnes, the sales volume of clinker increased by 0.6% to 4.2 million tonnes, and the sales volume of concrete rose 59.5% to 965 thousand cubic meters. Sales volume of high grade cement was 14.64 million tonnes, representing a year-on-year increase of 17.5%, and sales volume of low grade cement was 8.3 million tonnes, representing a year-on-year decrease of 2.7%.
In the first half of 2013, the cement average unit selling price of our operating companies in Shandong Region was RMB243.7 per tonne, representing a year-on-year decrease of 13.0%, that in Northeast Region was RMB274.0 per tonne, representing a year-on-year decrease of 9.1%, that in Shanxi Region was RMB218.6 per tonne, representing a year-on-year decrease of 6.8%; and that in Xinjiang Region was RMB228.6 per tonne, representing a year-on-year increase of 6.4%. Our operating companies in Shandong Region recorded sales revenue of RMB4,720 million, accounting for 66.8% of the Group's total sales revenue in the first half of 2013. Our operating companies in Northeast Region reported sales revenue of RMB1,897 million, accounting for 26.8% of the Group's total sales revenue in the first half of the year. The commencement of operations for operating companies in Shanxi and Xinjiang will make more contributions to the Group's sales revenue.
Two newly added projects were put into operation, including a 4500t/d clinker production line project with 2 million tonnes cement grinding production line of Jincheng Shanshui Heju Cement Co., Ltd. and a cement grinding production line of Shule Shanshui Cement Co., Ltd. with an annual output of 1 million tonnes (Phase II). As at 30 June 2013, the Group had a total production capacity of 92.64 million tonnes of cement, 40.39 million tonnes of clinker and 14.60 million cubic meters of concrete.
The Group continued to improve its cost control. During the period, the proportion of raw materials costs to revenue was 23.8%, an increase of 1.3 percentage points compared with same period last year. The Group's average unit purchase price of coal in the first half of 2013 decreased by 17.5% to RMB577.2/tonne compared with same period last year. The proportion of coal costs to revenue was 20.8%, a decrease of 3.6 percentage points compared with same period last year. Output of residual heat power generation was 498 million KWH in the first half of 2013, thus reducing the cost of clinker by RMB133 million.
Mr. Zhang concluded, "As the Chinese government has attached more importance to the quality of economic growth and slowed down the pace of economic growth on purpose, the growth of fixed asset investment closely related to the cement industry also slowed down accordingly. Although the problem of overcapacity in the cement industry has aroused the highly attention of the Chinese government, it takes time to resolve due to the shift of the economic development cycle and the lead time for elimination of obsolete production capacity. Looking ahead, the cement industry is still facing relatively big challenges. However, the continuing promotion of urbanization and infrastructure development by the Chinese government will provide a sustained and steady support to the cement industry. The Group will continue to consolidate its core markets, explore new markets and enhance its brand recognition. We will also reinforce our efforts in internal control and management, minimize procurement costs and enhance market competitiveness. Meanwhile, we will continue to improve the industrial strategic layout and strengthen the regional control advantage. The Group will adopt effective measures to deal with all kinds of difficult situations with perseverance, in order to deliver good returns to our shareholders."
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