Malaysia: CMS Cement division sees 14% drop in 9M16 pretax profits

Malaysia’s Cahya Mata Sarawak Bhd (CMS) reported a total revenue of MYR1.10bn and a pretax profit of MYR160.41m in the first nine months of 2016, down 14 and 40 per cent YoY, respectively.

The group’s cement division recorded a pretax profit of MYR76.98m, a decrease of 14 per cent YoY when compared with the record MYR89.23m recorded in 9M15. The company attributes the fall in profits to lower sales volumes, expenditure linked to the new cement mill and an unscheduled shutdown of the clinker plant as a result of the prolonged maintenance work in January 2016. In addition, the higher costs related to imported raw materials and cement due to the weaker ringgit also negatively impacted the cement producer’s results.

“Our performance during the first nine months of this year has been affected by challenging market and operational conditions. These macro factors included low commodity selling prices, higher costs of raw materials and of imported cement (in 1H16) resulting from the strong US dollar in the Cement Division, and generally the sluggish private and public sector demand attributable to bank lending restraints and the lack of any new big projects,” said CMS Group managing director, Richard Curtis.