Taiwan Cement Corp (TCC, 台灣水泥) plans to raise NT$40 billion (US$1.32 billion) by the end of this year to replenish its operating capital, a company executive said yesterday.
“The funds would be used to finance green energy projects and overseas investments,” Taiwan Cement chairman Nelson Chang (張安平) told reporters after an annual shareholders’ meeting in Taipei.
The company is working on seven or eight projects in Taiwan, Chang said, adding that it is still discussing the details of the financing plan, with options including the issuance of new shares, depositary receipts or unsecured overseas corporate bonds.
As it aims to transform itself into a green service provider, the nation’s largest cement maker has engaged in energy-related projects over the past several years, including a photovoltaic power plant in Changhua County with an installed capacity of 15 megawatts that began generating electricity on Tuesday.
Apart from energy projects, the company is also exploring business opportunities outside of Asia, Chang said.
Taiwan Cement on Thursday last week said it is in talks with Turkish conglomerate Sanko Holding SA about a strategic partnership, which could be a springboard to the European market.
Chang said he is upbeat about the company’s business outlook and expects cement prices in the Chinese market to remain high in the second half of the year.
Cement prices usually go down in the rainy season, but Beijing’s new stringent environmental standards and a peak-shifting production scheme for Chinese cement suppliers should help offset the seasonal effect, he said.
Yuanta Securities Investment Consulting Co (元大投顧) analyst Leo Lee (李侃奇) provided a similar outlook, saying that Taiwan Cement’s net profit might reach a record high this year on the back of a widening spread between material costs and product selling prices.
“We have seen a downtrend in coal prices so far this year, which is very likely to continue,” Lee told the Taipei Times by telephone, citing coal as the most important material used in cement production.
Meanwhile, Taiwan Prosperity Chemical Corp (信昌化學工業), Taiwan Cement’s chemicals manufacturing arm, is expected to benefit from improving customer demand for phenols this year, Lee said.
Shareholders yesterday approved the company’s proposal to distribute a cash dividend of NT$1.5 per common share, along with a stock dividend of NT$1 per common share.
The cash dividend represented a payout ratio of 73.9 percent based on the company’s earnings per share of NT$2.03 last year.
Net profit expanded 19 percent from NT$6.36 billion in 2016 to NT$7.6 billion last year, while revenue grew 10 percent from NT$89.56 billion to NT$98.31 billion, Taiwan Cement said in an annual report.
Taiwan Cement was last year the sixth-largest cement producer in China, with a total production capacity of 54.47 million tonnes, China Cement Association data showed.
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