China: Huaxin first-half profit plunges 82%

Huaxin Cement reported 1H15 net profit of CNY89m, down 82 per cent YoY, in line with the company’s guidance at the end of July indicating a drop of 80-85 per cent.

The Holcim group company said thesix-month decline was attributed to lower clinker and cement prices (-12 per cent YoY) offsetting higher sales volumes (23Mt, +1.4 per cent YoY, together with increaesd finance expenses (+9 per cent YoY). Revenue declined by 11 per cent YoY to CNY6.4bn, but this was partially offset by lower cost of goods sold, resulting in gross profit being down 30 per cent YoY.

Given weak downstream demand, and sharply lower average selling price in an oversupplied market, the company warned that 9M15 net profits are likely to fall by 50 per cent YoY.