Huaxin Cement sees revenue fall 2% in 1H22

China’s Huaxin Cement Co Ltd has reported revenue of CNY14,389m (US$2087m) in the first half of 2022, down 2.41 per cent YoY. The fall is being blamed on lower cement sales volumes and higher fuel costs. Over the same period, net profit attributable to equity shareholders contracted by 34.9 per cent to CNY1587m. Due to the country’s extreme macro-economic environment, sales volumes of cement and ready-mixed concrete fell 21.5 per cent YoY in the first six months of 2022 to approximately 29Mt, while aggregate output came in at 36.6Mt, up 83 per cent YoY.

During the six-month period, operating income from the group’s cement business stood at CNY10.3bn, down 13.8 per cent YoY, while operating income from domestic cement declined by 21 per cent YoY to CNY8.5bn. Production costs in the cement segment were up by 21.9 per cent YoY in the 1H22, leading to a fall in the gross margin per ton of cement by around CNY16/t to CNY89/t. The first half of 2022 saw a thermal substitution rate of approximately 10.87 per cent, up 4.67 percentage points on the same period a year earlier.

Over the reporting period, the company continued to expand its cement activities with Nepal Narayani Ltd putting a new dry cement clinker line of 3000tpd into operation, while the second phase of the 4000tpd cement clinker line at Tanzania Maveni is now ready for operation.

Looking ahead to the second half of 2022, although the group expects cement demand to improve as the Chinese economy returns to normal following the pandemic, the rate of recovery could be hindered by the staggered production policy along with competition within the industry. The company intends to improve its business performance by stepping up its use of alternative fuels to help control costs and lower expenses.