Anhui Conch Cement Company (914) Q2 2024 earnings summary

Executive summary

• Revenue for the first half of 2024 was RMB45.57 billion, down 30.44% year-over-year, with net profit attributable to equity shareholders at RMB3.49 billion, a 48.37% decrease year-over-year; EPS was RMB0.66, down RMB0.61 per share.

• The cement industry faced shrinking demand, fierce competition, and low prices, leading to a significant decline in profitability across the sector.

• The Group focused on operational resilience, cost control, innovation, and expanding production capacity in clinker, cement, aggregates, and concrete.

• No interim dividend was declared for the first half of 2024.

Financial highlights

• Gross profit margin for self-produced products fell by 4.62 percentage points to 23.01% year-over-year; consolidated gross margin declined to 17.95%.

• Net cash flows from operating activities increased 35.75% year-over-year to RMB6.87 billion.

• Total assets as of June 30, 2024, were RMB243.73 billion, down 1.06% from year-end 2023; total liabilities decreased 1.66% to RMB47.53 billion.

• Gearing ratio was 19.50%, down 0.12 percentage points from year-end 2023.

• Basic earnings per share was RMB0.63, down from RMB1.22 in the prior year period.

Outlook and guidance

• Infrastructure is expected to remain the main driver for cement demand in the second half of 2024, with government policies supporting market stabilization and green transformation.

• The Group will focus on cost reduction, efficiency improvement, digital transformation, green initiatives, and expansion in new energy and environmental protection sectors, while pursuing M&A and overseas expansion.