Tokyo Cement net profit held back by tax increases, Sri Lanka

Sri Lanka's Tokyo Cement (Lanka) Plc said net profits for the March quarter rose just two per cent to SLR130.24m a year earlier, held back by a steep increase in taxes.

According reports by Sri Lanka business online, the Japanese-Sri Lanka joint venture, said revenues rose sharply by 61 per cent to SLR6.81bn in the March 2012 quarter, lifted by the post-war construction boom.

Gross profits also rose 36 per cent to SLR832m, but steep increase in income tax to SLR177m in the March 2012 quarter from just SLR14m a year earlier, kept profits nearly flat.

Full-year revenues grew 41 per cent to SLR22.93bn, while gross profits grew at much slower 16 per cent to SLR3.90bn.

Tokyo Cement, which marks 30-years of operations this year has it main manufacturing facility is situated at the eastern seaport town of Trincomalee.

Sri Lanka’s total cement usage in 2011, rose 21.6 per cent to 4.6Mt, according to Central Bank of Sri Lanka figures.

Domestic production rose 13.6 per cent to 1.97Mt, while cement imports was up 28.4 per cent to 2.58Mt. Much of the cement demand came from government-related projects, to build roads, bridges, a port in the south, an airport in the south and large-scale projects in the north and east.

Tokyo imports clinker, which is ground at the Trincomalee plant. It also has a packing plant. The company’s production costs have come under pressure from a weak rupee since late last year.

Sri Lanka also has price controls on cement, which is part of a series of restrictions placed on private business in recent years.