TCC Group Holdings (1101) Q2 2024 earnings summary

Executive summary

• Achieved robust financial performance in 1H2024, with revenue of NT$64.5 billion (US$2,014m), up 19.5% year-over-year, and net income of NT$5.75 billion (US$179m), a 10.3% increase.

• Major acquisitions included 60% of Cimpor Portugal Holdings and 20% of TCAH, expanding cement operations in Turkey and Portugal.

• Continued strategic expansion in low-carbon cement, green energy, and energy storage, with a strong focus on ESG and net-zero commitments.

• Maintained a diversified global presence, with increasing revenue contributions from Europe and Turkey.

• Total assets reached NT$583.5 billion (US$18,212m) as of June 30, 2024.

Financial highlights

• 1H2024 operating revenue reached US$2,014m (NT$64.5 billion), up from US$1,684m; gross profit margin improved to 18% from 16% in H1 2023.

• Net income for 1H2024 was US$179m (NT$5.75 billion), up from US$163m.

• Cement segment contributed 75.9% of 1H2024 revenue; green energy and battery/ESS segments showed strong growth.

• Basic EPS for H1 2024 was NT$0.51, compared to NT$0.64 in H1 2023.

• Net leverage ratio improved to 1.8x in 1H2024, down from 2.8x in 2023.

Outlook and guidance

• Net leverage expected to fall to 2.6x by end-2024, supported by robust EBITDA growth and high capex.

• Strategic focus on expanding low-carbon cement in Europe, leveraging OYAK and Cimpor acquisitions.

• Continued investment in renewable energy, energy storage, and fast-charging infrastructure.

• The group expects continued growth from recent acquisitions and ongoing investments in energy storage and green energy.

• Management is monitoring the impact of new carbon fee regulations, which are expected to affect operations starting in 2024.