Malayan Cement Bhd is likely to turn a profit from 2020 onwards by reducing operating costs and implementing a cost rationalisation initiative which began in 1H19, according to a research house.
In the 1H19 Malayan Cement's net loss fell by 45 per cent YoY to MYR80.5m (US$19.4m) and while revenue was down six per cent, operating costs declined by 12 per cent. The company has since benefitted from improved cement prices, up from MYR210 to MYR230/t in October.
Analyst Affin Hwang Capital expects that Cement Malaysia will also see demand pick up with heightened construction activity in 2020. "Coupled with lower operating costs, we believe the company will return to profitability from 2020 onwards," said Affin Hwang Capital.
