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Improvement in sales and revenue for China Tianrui Cement in 2013

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World Cement,

China Tianrui Group Cement Company Limited has announced its annual results for the year ended 31 December 2013, reporting an increase in cement sales volumes and revenue. During the year, the company continued implementing its policy of reducing cost and expanding market coverage to enhance efficiency and improve the results of its operations, competitiveness and sustainability.

2013 financial highlights

  • Sales volume of cement totalled 36.9 million t, representing an increase of 41.4% y/y (10.8 million t) compared with 2012.
  • Revenue increased by 14.1% y/y (RMB1,070.3 million) to RMB8,661.2 billion in 2013, from RMB7,590.9 billion in 2012.
  • Gross profit stood at RMB1,895 million in 2013, a slight decrease from RMB1.898.9 million in 2012.
  • EBITDA improved to RMB2,211.8 million, compared to RMB2,202.2 million recorded in 2012.
  • Profit decreased from RMB762.8 million in 2012 to RMB483 million in 2013.
  • Earnings per share stood at RMB0.23, decreasing from RMB0.33 in 2013.

Improving operational efficiency and production capacity

The company took various measures to reduce costs in 2013, including optimising its utilisation rates and centralising procurement. China Tianrui Cement believes that maintaining a higher utilisation rate and centralising the procurement of coal and raw materials have resulted in the company having a significant cost advantage over major competitors in the primary markets of Henan and Liaoning, China.

In 2013 the company acquired seven cement and clinker companies, comprising one clinker production line with an aggregate production capacity of approximately 1.2 million tpa and six cement production lines with an aggregate production capacity of approximately 5.3 million tpa. These acquisitions contributed RMB615 million to the company’s total revenue and RMB41 million to its operating profit in 2013.

Industry performance

Cement demand in China continued to grow in 2013, primarily driven by the growth of investments in infrastructure and real estate. Data released by the National Bureau of Statistics shows that total cement production in China reached 2.41 billion t in 2013, representing a y/y increase of 9.57%.

The Chinese central government is making efforts to rebalance the supply and demand of heavy industries, including the cement industry. With the government’s encouragement and promotion, mergers and acquisitions led by major cement producers are expected to accelerate market consolidation in the cement industry. The optimal allocation of resources and sustainable growth will be the key task for cement industry development going forward.

Read the full Annual Results Announcement for the Year Ended 31 December 2014 here.

Adapted from press release by Rosalie Starling

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