Taiwan Cement Corp (台灣水泥), the No. 1 cement maker in Taiwan, said yesterday that its revenue should rise by 7 percent to 13 percent in the second half of this year from NT$58.59 billion (US$1.96 billion) in the first half as sales increase in its traditional peak season in the fourth quarter.
The company expects its revenue this quarter to be between NT$28.67 billion it reported in the first quarter and NT$31.87 billion last quarter, while its revenue in the fourth quarter would be as high as the NT$34.21 billion it registered a year earlier, the company said.
SEASONAL DEMAND
Cement prices and shipments tend to rise starting the end of the third quarter through the fourth quarter as most infrastructure construction projects are conducted in the period, company senior vice president Edward Huang (黃健強) said in an investors’ conference yesterday.
The company’s shipments of four production lines in Guangdong Province, China, increased to 30,000 tonnes a day in the past 15 days this month from an average of 25,000 tonnes a day to 26,000 tonnes a day, Huang said.
Huang said the company plans to raise the prices of its cement in the province this week or next week by between 20 yuan and 30 yuan (US$3.3 to US$4.9) per tonne from the current 310 yuan.
PRICE HIKE
The company also plans to raise prices in Jiangsu Province, China, by between 20 yuan and 30 yuan per tonne from current 260 yuan at the end of this month, when the Youth Olympic Games end.
The company’s Guangdong capacity is about 17 million tonnes a year, compared with 4.75 million tonnes in Jiangsu.
Total capacity in China is 55.2 million tonnes a year, while Taiwan Cement has capacity of 10.6 million tonnes a year in its home market.
Meanwhile, the company plans to cut its production in Taiwan to 7 million tonnes this year from 8.4 million tonnes last year to satisfy a government policy to reduce cement exports to 30 percent of a company’s local production.
Last quarter, the company reported profit of NT$3.2 billion, or NT$0.86 per share, up 74.4 percent from NT$1.83 billion, or NT$0.5 per share the previous quarter and 23.5 percent from NT$2.59 billion, or NT$0.7 per share, the previous year, according to a company filing to the Taiwan Stock Exchange.
SLOW SEASON
The first quarter of a year is a slow season for the industry because of fewer working days, which caused the quarter-on-quarter increase last quarter, Huang said, adding that the year-on-year growth was because of lower prices of coal, a raw material to make cement.
Chinese coal cheaper
Coal prices in China dropped to below 450 yuan per tonne recently from 550 yuan per tonne a year ago as the economy in China declined, Huang said.
Because of lower cement prices, gross margin at Taiwan Cement rose to 20.49 percent in the first half of this year from 16.57 percent the previous year, Huang said.
Huang said the company’s profit this year would be higher than NT$10.03 billion on the back of lower coal prices.
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