Mon, Aug 13, 2018 - Page 16 News List

Taiwan Cement profit hits quarterly record

BEATING PREDICTIONS:The company said that rising prices and sales resulted in its quarterly earnings per share exceeding NT$1 for the first time in 10 years

By Chen Cheng-hui  /  Staff reporter

Taiwan Cement Corp (台灣水泥) on Friday posted a record quarterly profit, due mainly to higher cement prices in China, rising sales and increased contribution from its China-based subsidiary, TCC International Holdings Ltd (台泥國際).

The Taipei-based firm’s second-quarter net income attributable to the parent company hit NT$7.06 billion (US$229.9 million), up 228.71 percent year-on-year from NT$2.15 billion, the company said in a filing with the Taiwan Stock Exchange.

Earnings per share (EPS) rose from NT$0.53 to NT$1.51 over the period, it said.

Consolidated revenue rose 34.83 percent to NT$33.32 billion from NT$24.71 billion, while gross margin and operating margin grew to 30.82 percent and 26.95 percent, up by 9.5 and 10.52 percentage points from a year earlier respectively, the company said.

The firm’s second-quarter EPS beat KGI Securities Investment Advisory Co’s (凱基投顧) estimate of NT$1.14 and a market consensus forecast of NT$0.99.

It was the first time that the company’s quarterly EPS exceeded NT$1 in the past decade and it was the highest quarterly figure for the period, Taiwan Cement said in a statement.

Taiwan Cement, which has a substantial share in the Chinese market, reported total net income attributable to the parent company of NT$10.01 billion in the first half of this year, up 235.76 percent year-on-year, with EPS of NT$2.14.

The company, which is the sixth-largest cement maker in China by capacity, benefited from healthier supply-demand dynamics amid Beijing-guided production curbs and disciplined production by its industry peers, analysts said.

“With supply likely to tighten further in the second half of 2018, and southern China cement demand likely to expand on seasonality and greater infrastructure construction demand, the price of cement might remain at a high level with less fluctuation,” Yuanta Securities (Hong Kong) Co (元大證券香港) analyst Tania Wu (吳小佳) said in a report on Wednesday last week ahead of the release of the company’s quarterly figures.

As cement’s average selling price has this year increased by 23 percent as of Aug. 3 to 415 yuan (US$60.62) per tonne in China, the company said it is optimistic about business performance in the second half of the year, but added that the trade war between China and the US might increase uncertainties regarding its operations.

Sales this quarter are expected to defy Taiwan Cement’s historic pattern by increasing 35 percent annually to NT$31.1 billion, but would be down about 6.6 percent from last quarter, KGI analyst Angus Chuang (莊政翰) said in a research note on Friday.

KGI forecast that Taiwan Cement’s full-year profit this year would grow 198 percent annually to a record of NT$22.6 billion, or NT$4.43 per share, Chuang said.

Taiwan Cement shares on Friday rose 2.47 percent to NT$41.5 in Taipei trading. The stock has advanced 13.85 percent so far this year.

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