TCC INTERNATIONAL HOLDINGS LIMITED 
By Contact: | Shiu Ka Yue/ Phoebe Leung/ Christine Chan/ Vivian Cheung | Date: | 8 August 2013 |
Tel: | 2801 6239 (9029 1865/ 9339 3206/ 6173 9039/ 9443 0789) | Pages: | 3 |
TCC International Holdings Limited ("TCCIH" or the "Company", stock code: 01136) together with its subsidiaries (the "Group") reported a 114.5 per cent year-on-year growth in profit attributable to owners of the Company to HK$577.0 million for the six months ended 30 June 2013, with basic earnings per share of HK14.3 cents for the period under review. Revenue for the period amounted to HK$5,477.6 million (2012 same period: HK$5,322.7 million), with gross profit margin leaped by 4 percentage points to 20.9 per cent during the half year period.
TCCIH's board of directors has declared an interim dividend of HK1.6 cents per ordinary and preference share for the six months ended 30 June 2013 (2012 corresponding period: nil).
Sales volume of the Group in the first half of the year amounted to approximately 20.4 million metric tons, which was 10.9 per cent higher than that of the corresponding period last year. Surge in sales volume was mainly driven by the resumption in infrastructure development and the healthy progress of housing construction in Mainland China. Moreover, the Group's effort in enhancing its operation efficiency through strengthening production process and logistics management during the period under review began to pay off, mitigating the adverse impact of decline in the Group's average selling price ("ASP"). As a result, most of the facilities managed by the Group reported improved gross profit margin for the six-month period.
The Group's Southern, Southwestern, Eastern, Northeastern operations accounted for 49%, 33%,
11%, and 3% of its total sales volume respectively during the half year period.
In Southern China, after deducting the inter-group sales, the Group sold a total of 10.0 million metric tons of clinker and cement, which was 2.0 per cent more than that of the corresponding period last year.
The Group's two plants in Guangdong province together generated a sales volume of approximately
5.9 million metric tons. However, the Guangdong operations suffered a retreat in gross profit margin due to squeezed ASP, and reported a declined after-tax profit year-on-year.
On the other hand, the Group's Guangxi operations had experienced a strong rebound and returned to profitability. Significant profit contribution from the Guangxi operations had contributed to an improved profit after tax for the Group's Southern China region.
The Southwestern operations registered a significant surge in both sales volume and gross profit margin with all of its production lines running at optimum utilisation. Sales volume of the region's operations increased by 43.5 per cent year-on-year to 6.6 million metric tons during the period under review. The region reported a handsome profit after tax as compared to a loss in the corresponding period last year. The Southwestern operations became a major profit contributor during the period under review.
Sales volume of the Group's Eastern China operations in the half-year period was slightly lower than that of the corresponding period last year, and amounted to 2.3 million metric tons. However, improvement in gross profit margin had contributed to the region's strong profit growth, and the region reported an impressive upsurge in after-tax profit.
In Northeastern region, the Group's sales volume declined by 16.0 per cent to 699,000 metric tons due to a prolonged winter in the region. Nevertheless, the Northeastern region operations managed to enhance its efficiency through effective management of its overheads and achieved an improved after-tax profit, despite a year-on-year decline in ASP.
Commenting on the market outlook for the second half of 2013, Mr. Koo, Cheng-Yun, Leslie,
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PRESS RELEASE
Chairman of TCCIH, said: "We expected the overall operating environment of Mainland China cement sector continues to be shadowed by overcapacity. However, steady development of the domestic economy is expected to sustain considerable cement consumption in the second half of the year. The railway department's commitment to complete RMB650 billion fixed assets investment during the year, and optimistic sentiment in the property sector are expected to support strong cement consumption after the rainy season in the second half of the year."
In addition, the State's schedule to complete 4.7 million affordable housing units within this year is basically on target, with 2.36 million units completed in the first half of the year. Cement consumption is expected to be boosted further by the State's plan to redevelop squatter settlement for 3.04 million households this year.
The local government's river passage dredging project along the Beijiang River, a tributary of the Pearl River, will enable the Group's plants in Guangdong to lower their transportation costs via broader application of waterway delivery. The Group is planning to establish an extensive silo network covering the Pearl River Delta region to effectively utilize logistic support along the Pearl River drainage.
In Sichuan, the Group's Luzhou production line has commenced operation in July this year. The production line has a daily capacity of 5,000 metric tons of clinker. Part of the clinker from the production line will be supplied to the Group's Naxi grinding mill in Luzhou.
Furthermore, the second production line with an annual capacity of 1,000,000 metric tons in Kaili, Guizhou is under construction and is scheduled for operation in the second half of 2014.
"Apart from expansion in scale of operation, the Group maintains its emphasis on efficiency enhancement and environmental protection. We believe only those sustaining cost-effectiveness enhancement and pollution control as well as energy and resources saving could survive the competition and outperform its peers," noted 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 Guizhou, Chongqing, Sichuan Liaoning and Yunnan, 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 is TCCIH Condensed Consolidated Statement of Profit or Loss and Other Comprehensive
Income for the six months ended 30 June 2013.)
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PRESS RELEASE TCC INTERNATIONAL HOLDINGS LIMITED(Stock Code
