International Cement Group (KUO) H1 2024 earnings summary

Executive summary

• 1H2024 revenue fell 11% YoY to S$109.603m; net profit attributable to shareholders declined 92% to S$0.933m amid lower cement sales, margin pressure and FX losses.

• Operating cash flow was positive at $20.9m; Korcem was scheduled for completion in Q4 2024, adding 1.5m tonnes of annual capacity and taking total capacity to 5.5m tonnes.

Financial highlights

• Revenue was S$109.603m versus S$123.098m; gross profit was S$34.037m versus S$42.822m, and gross margin declined to 31% from 35%.

• Profit before tax fell to S$10.128m from S$24.0m; profit after tax was S$3.992m versus $18.7m.

• Other expenses rose to $8.5m, including $5.9m of FX losses versus $2.0m of gains in 1H2023 and $1.4m rental expense for unused train carriages.

Outlook and guidance

• Urbanisation, infrastructure projects, Chinese investment and government initiatives support regional cement demand; Tajikistan GDP was projected to grow 6.5%, and Kazakhstan GDP up to 4.7% in 2025.

• Historically stronger 2H demand, expanded distribution, new distributors and stepped-up marketing are expected to support growth; Sharcem transportation issues were resolved, with increased nearby-region sales expected in 2H2024.

• Korcem was expected to complete in Q4 2024, adding 1.5m tonnes of annual capacity and taking total capacity to 5.5m tonnes.