China's Dongwu Cement International Ltd has reported revenue of CNY177.8m (US$25.9m) in the first half of 2022, down 25.7 per cent on the same period a year earlier. In terms of gross profit, a loss of CNY13.5m was seen in the 1H22, compared to a profit of CNY45.6m in the 1H21. According to the company, disruptions arising from the COVID-19 pandemic and subsequent quarantine measures had a significant adverse impact on the group’s revenue and financial performance over the six-month period.
Cement production was also interrupted during the 1H22 with lockdown measures restricting people’s movements, resulting in cement sales by the company of 478,000t, down 19 per cent YoY. Capex during the first half of 2022 stood at CNY9.3m, compared to CNY23.5m in the same period a year earlier.
Cement production costs have continued to climb significantly while domestic cement prices have fallen over the 1H22 from high levels. Average cement prices in June 2022 in the company’s main sales regions stood at CNY380/t (US$55.38) in Nanjing, down 18.3 per cent YoY, CNY415/t in Hangzhou, down 15.3 per cent YoY, and CNY400/t in Shanghai, a fall of 15.8 per cent YoY.
According to the company, from January to June 2022 China’s domestic cement output totalled 0.977bnt, down 15 per cent YoY, marking a new low for the same period in 11 years. The second quarter of 2022, which should traditionally have been a peak season, saw cement output decline as the real estate downturn continued. The YoY growth rate in cement output fell by 18.9 per cent in April 2022 and was down by 17 per cent in May 2022, to the lowest levels in history.
