TCC International Holdings Ltd could be facing a 60 per cent drop in 2012 profit due to slowing demand and pricing pressures in China.
The company, a subsidiary of Taiwan Cement, filed a profit warning to the Hong Kong Stock Exchange, forecasting that full-year 2012 net profit could drop significantly due to a supply glut and a decline in Chinese cement prices.
TCC operates in several provinces in China including Guangdong, Fujian and Anhui. TCC said in a statement that in the first half of last year, "substantial additional capacity in the cement industry in China and weaker market demand squeezed cement average prices." It further added that the oversupply and slowing demand continued into the third quarter, although the market conditions started to improve in the final three months.
The company's bottom line is expected to be "adversely affected" for full-year and it is possible that a YoY decline of about 60 percent in net profit will be reported.
