West China Cement has issued a profit warning for the six months ended 30 June 2022. According to the company, net profit attributable to shareholders is expected to fall by 40-45 per cent compared to the same period a year earlier. One of the reasons for the decline is the group’s foreign exchange gain which came in at CNY27.5m (US$4.05m) in the first six months of 2022, compared to a gain of CNY347.3m in the same period in 2021. This is due to the exchange rate difference incurred on intercompany balances between various subsidiaries within the group with differing functional currencies.
The fall in net profit is also being attributed to a significant gain of CNY79.3m recorded in the first six months of 2021 due to the disposal of an associate. A similar gain is not expected in the same period this year. Finally, the group has seen an increase in finance costs of CNY73.3m in the first half of this year, mainly due to the five-year senior notes with an aggregated principal amount of US$600,000,000 due in 2026, issued by the company in July 2021.
The full consolidated results from West China Cement for the first six months of 2022 are expected to be released by the end of this month.
