Lafarge Malayan Cement reported a YoY slight rise in consolidated revenue for the first quarter of 2013 but income from its cement division was impacted by a tough pricing environment. Its 2013 results are expected to be driven by key government infrastructure projects led by the Economic Transformation Programme (ETP) and 10th Malaysia Plan (10MP) and the company is also considering expanding capacity.
Consolidated revenues for the first quarter of 2013 were MYR644.9m (US$212m), slightly higher than the same period of last year. However, increased aggregate and concrete sales were offset by lower revenue generated from the cement sector due to pricing pressures which continue to prevail. Profit before tax for the current quarter of MYR73.4m was 16 per cent lower compared to MYR87.1m in the same period last year, mainly due to lower cement prices.
Compared to the fourth quarter of last year revenue was down by seven per cent mainly due to lower volumes as a result of the festive season during the first quarter. Profit before tax in the current quarter of MYR73.4m was lower compared to the preceding quarter, attributed to lower sales volumes and plant maintenance.
The company remains positive on the construction outlook for the remainder of 2013 due to the continued progress of key infrastructure projects and on going property development projects. "Domestic demand for cement and other building materials should continue to grow whilst the outlook for the export market is expected to be stable," the company said in a statement. On the pricing front, Lafarge Malayan Cement expects the current situation to be unsustainable and that pricing stability will return in the coming months.
Lafarge Malayan Cement is now looking to expand capacity, although according to the company's President and Chief Executive Officer Bradley Mulroney, the board has not finalised whether to focus on concrete or cement production in its expansion plan.
