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Taiwan Cement post 43% increase in half year net profit

World Cement,

One of Taiwan's leading cement makers announced recently that its net profit during the six-month period totalled NT$4.05 billion (US$140 million), a significant 42.77% increase from last year.

Earnings per share increased from NT$0.86 in the first half of last year to the current NT$1.1. This is the second highest in the company's history, behind only the NT$1.16 EPS registered in the first half of 2007.

During the same period, Taiwan Cement generated NT$11.98 billion in sales, up 10.42% from a year earlier, and its gross margin stood at 6.5%, compared with 6.22% a year ago.

According to the company, the improving bottom line largely reflected the contribution made by its China-based subsidiary TCC International Holdings Ltd, which posted HK$909 million (NT$3.36 billion) in interim profit, up from HK$112 million a year earlier. TCC International has been listed in Hong Kong since October 1997.

Taiwan Cement said it expects a better earnings outlook for the second half of this year as the cement sector in China will benefit from the industry's peak season, when product prices will likely rise 8 – 12% from the first half.

The higher product prices on the mainland will also reflect ongoing power rationing there, which has put a lid on cement production volume.

In addition to this, the company recently announced it has set aside NT$7.2 billion, to acquire Kehua, the largest cement producer in Chongqing of Sichuan province, China.

Thanks to this acquisition, the group’s production capacity in China will exceed 64 million tpa. Taiwan Cement aims to become one of China’s top five cement producers.

Earlier this month, main rival Asia Cement Corp. announced an increase of 58.82% net profit of NT$5.92 billion for the first half of this year, up from a year earlier. EPS was NT$1.92, compared with NT$1.25 recorded a year ago, also due to robust growth in its operations in China.

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