Shanshui Cement profit surges 206.5% TO RMB1.2bn

The company continues to expand production capacity and consolidate market leadership.

China Shanshui Cement Group Limited (“Shanshui Cement”), the largest cement enterprise in Shandong and Liaoning Provinces in China, announced its unaudited interim results for the six months ended 30 June 2011, prepared in accordance with International Financial Reporting Standards.

During the period under review, the Group achieved year-on-year revenue growth of 65.8% to RMB7,832 million. Gross profit increased by 155.4% to RMB2,470 million and profit attributable to equity shareholders of the Company achieved remarkable growth of 206.5% to RMB1,237 million. Basic earnings per share reached RMB0.44, up 214.3% compared with the same period last year. The Board did not recommend payment of an interim dividend for the six months ended 30 June 2011, according to a Shansui Cement report.

Mr. Zhang Caikui, Chairman of Shanshui Cement, said, “In the first half of 2011, the Group has benefited from the Government’s increase in the volume of infrastructure construction and the continued demand of the property industry for cement. At the same time, it has optimized its corporate strategy by building new production lines as well as organisational restructuring.

In addition to expanding production scale, the Group has also been exploring development opportunities for the Group, while strengthening internal control and effectively boosting operational efficiency. All of these strategies have delivered sustainable operating results during the period under review.”

During the first half of 2011, the Group’s revenue was mainly derived from the sale of cement, which occupied 82.5% of the Group’s total sales revenue, with clinker and other products occupying 12.2% and 5.3% respectively. The Group sold 22.3 million tonnes of cement, a year-on-year increase of 44.7%, translating to sales revenue of RMB 6,461 million, up 89.7% over the same period last year. Clinker sales volume was 3.6 million tonnes and sales revenue was RMB956 million. Due to the strong demand for high-quality cement by government infrastructure projects and real estate projects, sales volume of high grade cement increased by 67.7% to 13.3 million tones , accounting for 59.5% of the Group’s total sales volume of cement (1H 2010: 51.3%).

Looking ahead, Mr. Zhang said, “Amid the favorable conditions such as continued strong support of the Central Government for construction of affordable housing, water treatment facilities and agricultural infrastructure as well as the trial run of “bringing cement products to rural areas” in Shandong Province, we expect the demand for cement to remains strong in the second half of the year. In the future, we plan to seize the development opportunities in the industry to accelerate the implementation of the existing cement projects and downstream projects. At the same time, the Group is actively considering merger and acquisition projects to further consolidate our market leadership in Shandong Province and Northeastern China.

These moves would enable us to realise our goal of increasing cement production capacity to 80 million tonnes. The Group also intends to enhance our integrated competitive advantage and expand our room for future development, thereby striving to achieve outstanding results and thus delivering better investment returns to our shareholders.”