TCC INTERNATIONAL HOLDINGS LIMITED 
By Contact: | Shiu Ka Yue/ Phoebe Leung/ Christine Chan | Date: | 20 March 2013 |
Tel: | 28016239 (90291865/ 93393206/ 61739039) | Pages: | 4 |
TCC International Holdings Limited ("TCCIH" or the "Company", stock code: 01136) together with its subsidiaries (the "Group") reported a 0.3 per cent year-on-year surge in revenue to HK$11,304 million for the year ended 31 December 2012 (2011: HK$11,266 million). Profit attributable to owners of the Company amounted to HK$610 million (2011: HK$1,638 million), with basic earnings per share of HK14.8 cents for the year under review (2011 restated: HK49.0 cents). Due to decline in the average selling price ("ASP") under the pressure of excessive supply of new capacity, gross profit of the Group adjusted to HK$2,105 million.
TCCIH's board of Directors recommends the payment of a final dividend per share of HK4.5 cents (2011: HK7.5 cents) for the year ended 31 December 2012.
During the year, the Group was able to increase its sales volume to 40.2 million metric tons, despite slowdown in infrastructure development, in particular the suspension of high-speed railway construction, along with a sluggish property market.
"The Group had gradually extended its market influence through expanding sales in various regions during the year, supported by an enlarged capacity from its recent acquisitions. Through its agile adjustment of sales strategies in different regions and swift response to changing market conditions, particularly the recovery of ASP during the industry peak season and accelerated cement consumption from public sector projects in the fourth quarter, the Group managed to lift its sales volume by 17.5 per cent from that of the previous year," said Mr Koo, Cheng-Yun, Leslie, Chairman of TCCIH.
In Southern China, the Group sold a total of 20.2 million metric tons of clinker and cement, which accounted for half of its total sales volume for 2012 and remained basically the same as that of the previous year.
In Guangdong, the Group's TCC Yingde Cement Co., Ltd.'s production lines had been running at high efficiency throughout the year, and managed to capitalise on the market recovery and ASP rebound in the fourth quarter to generate a favourable profit.
The incident occurred at Yingde Dragon Mountain Cement Co, Ltd.'s ("Yingde Dragon Mountain") limestone quarry had led to low utilisation since September 2012. Nevertheless, the Group's Yingde Dragon Mountain plant returned to normal production by the end of February 2013, and
the plant will thus be able to beef up its capacity utilisation and performance in 2013.
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PRESS RELEASE
Sales volume of the Guangxi plant significantly improved in the second half of the year. In view of the severe overcapacity in Guangxi, the Group effectively coordinated output distribution of its facilities in the two provinces, and directed about half of the output from the Guangxi plant for sale in Guangdong province.
The Group's Southwestern China operations posted a sales volume of 11.0 million metric tons during the year under review. The amount was almost three times of that of the previous year. This was mainly attributed to the running in of many of the region's new production lines, which had been operational throughout the financial year.
ASP of the Chongqing plant was under the pressure of excess new capacity supply during 2012. However, with lower production costs and improved efficiency, the Chongqing plant reported a profit for the year under review.
The Group's single production line in Guangan, Sichuan province, managed to partly offset the impact of low ASP with lower production costs, and only reported a mild loss for the year. Its performance experienced significant improvement in the second half of the year.
Most of the production lines in Guizhou province began to break even or generate a profit in the fourth quarter of the year.
For 2012, the Group sold 5.5 million metric tons of clinker and cement in Eastern China, and 1.9 million metric tons in Northeastern region.
The Group's Jurong plant in Jiangsu province maintained an optimum utilisation throughout the year, with a sales volume slightly higher than that of 2011. As to the Fuzhou grinding mills, a substantial portion of the clinker had been supplied by the Group's Jurong and Guangxi plants. The cement grinding mills had been able to benefit from the lower cost clinker despite decline in ASP.
The Group's Liaoning plant had been running at close to full capacity. However, the decline in product ASP in the province, in 2012, had softened the Group's Northeastern operations' gross profit margin and led to a retreat in profit year-on-year.
Subsequent to the year under review, the Group entered into agreements with Xinan Cement Company Limited and other parties regarding the distribution of various cement manufacturing interests controlled by Scitus Cement (China) Holdings Limited. Following the implementation of the agreements, the Group will be able to reallocate its resources in Southwestern region, and to concentrate its resources in the Southeastern part of Sichuan and the area surrounding
Chongqing municipality, leveraging its strong market presence.
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Commenting on the market outlook for 2013, Mr Koo said: "Following a year of severe decline in ASP, prices of clinker and cement are expected to remain at a relatively stable level after the first quarter of 2013, and there is room for upward adjustment given a large amount of civil engineering and building construction works commencing this year. To speed up its response to market demand and shorten the supply lead time, the Group is planning to establish grinding mills or silo in the proximity of its major markets. In addition, the Group intends to develop distribution facilities in the countryside to strengthen its penetration of the rural market."
"To ride along the tide of industry consolidation, the Group will continue to expedite its expansion in scale of operation and market influence in regional markets through merger and acquisition. It is imperative for the Group to establish a respectable size and an extensive market reach, in order to be enlisted among the top-tier cement manufacturers in Mainland China," added Mr Koo.
About TCCIH
TCCIH is principally engaged in the manufacture and supply of cement, clinker and slag powder, with a dominant market presence in Southern China, through a network of advanced and efficient production and handling facilities spanning from Guangxi, Guangdong, Fujian, Anhui to Jiangsu. In recent years, in addition to its organic growth, the Group has been expediting its expansion in operation and market coverage to fast growing markets such as Liaoning, Yunnan, Guizhou, Chongqing, and Sichuan through mergers and acquisitions of companies that possess advanced capacity and create synergy with the Group's existing operations.
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Issued by: TCC International Holdings Limited
Through: CorporateLink Limited
(Attached please find the audited consolidated statement of comprehensive income of TCCIH for the year ended 31 December 2012)
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PRESS RELEASE TCC INTERNATIONAL HOLDINGS LIMITED (Stock Code: 01136) Audited Consolidated Statement of Comprehensive Income For The Year Ended 31 December 2012 2012 HK$'0002011
HK$'000
Revenue 11,304,232 11,266,196Cost of sales (9,199,250)(8,377,409) Gross profit 2,104,982 2,888,787
Investment income 26,185 33,750
Other income, gains and losses 283,006 291,806
Selling and distribution expenses (599,358) (437,098) General and administrative expenses (717,651) (555,117) Finance costs (485,325)(428,995)
611,839 1,793,133Share of results of associates 154,910242,352
Profit before tax 766,749 2,035,485Income tax expense (152,141)(349,552)
Profit for the year 614,608 1,685,933Profit for the year attributable to:
Owners of the Company 610,000 1,637,880
Non-controlling interests 4,60848,053
614,608 1,685,933
