International Cement Group (KUO) H2 2023 earnings summary

Executive summary

• FY2023 revenue rose 14.3% to S$257.4M, while profit attributable to owners fell 44.2% to S$16.1M amid higher operating costs and tax expense.

• Cement generated 97.6% of revenue; growth in Tajikistan and Sharcem more than offset weaker Alacem performance, while drywall sales began in December.

Financial highlights

• Revenue increased to S$257.398M from S$225.195M; gross profit declined to S$89.970M from S$93.843M and operating results fell to S$45.521M from S$49.744M.

• Profit before tax was S$47.594M versus S$46.680M; profit for the year was S$29.054M versus S$38.830M, and owner-attributable profit was S$16.148M versus S$28.940M.

• EBITDA was S$60.752M versus S$66.179M; operating cash flow increased to S$78.881M from S$63.990M, while year-end cash fell to S$6.434M from S$11.531M.

Outlook and guidance

• Cement demand is expected to remain buoyant; Kazakhstan forecasts 5.8% average annual economic growth and 8.8% average construction growth for 2024–2028, while Tajikistan GDP is estimated to grow 6.0% in 2024.

• Korcem is scheduled for completion in mid-2024, increasing annual cement capacity from 4.0M to 5.5M metric tonnes; priorities include timely construction, distributor expansion, cost control and efficiency gains.

• Cost pressures, economic uncertainty and sales-price fluctuations are expected to put further pressure on profit margins; outlook is conditional on no unforeseen disruption to cement operations.