Asia Cement China (743) Q2 2024 earnings summary

Executive summary

• Revenue for the first half of 2024 was RMB2,689.4 million, down 34% year-over-year due to lower sales volume and prices amid weak cement demand in key markets.

• Net loss reached RMB411.2 million, a reversal from a net profit of RMB200.3 million in the same period last year, mainly due to decreased sales and prices.

• The cement industry faced persistent demand weakness, intensified competition, and adverse weather, with national cement output down 10% year-over-year.

Financial highlights

• Revenue: RMB2,689.4 million (down 34% year-over-year).

• Gross profit: RMB133.0 million (down from RMB646.0 million); gross margin fell to 5% from 16%.

• Net loss: RMB411.2 million (vs. net profit of RMB200.3 million last year).

• Cash and cash equivalents: RMB8,612.9 million as of 30 June 2024.

• Gearing ratio: 13% (down from 15% at year-end 2023).

Outlook and guidance

• Infrastructure investment is expected to support demand, but real estate weakness will continue to drag on cement consumption.

• The industry faces ongoing supply-demand imbalance and severe challenges; the company will focus on efficiency, quality, and market share retention.