China: Following on from other Chinese cement producers, which have reported large slumps in their half year profits, Xinjiang Tianshan Cement Co Ltd, based in the Xinjiang Uyghur Autonomous Region, has announced a first half net profit of US$18.9m, a drop of '60-80%' year-on-year.
The company stated that the decline in its half-year net profit is largely due to lower cement selling prices and rising financial expenditure. Other companies have stated that rising costs have included higher fuel prices, although this was not specified by Xinjiang Tianshan.
Meanwhile China's Sichaun Province announced that its cement sector had seen a near-60% plunge in its profitability in the five months to 31 May 2012, despite an 11% improvement in revenue in the entire building materials sector in that Province.
In addition the Hong Kong-listed Taiwan Cement International Holdings Ltd., has also warned that its net profit will decline by an estimated 50% year-on-year in the first half of 2012 due to China's strict macroeconomic controls and shrinking budgets for infrastructure projects.
TCC International reported that its net profit for the first half of 2011 was US$120.23m, although the corresponding figure for the first half of 2012 is likely to have dropped to less than US$60m.
While the slumps in profit have been dramatic, producers believe that they may be short-lived. China's cement market is expected to pick up at the end of the third quarter or early in the fourth quarter of 2012 as the country relaxes its macroeconomic controls, loosens its monetary policy and will give more rapid approval to infrastructure projects.
Update - 13 July 2012: Jiangxi Wannianqing Cement Co Ltd has announced that its first half net profit will plummet by about 80% year-on-year to US$8.5-9.9m.
