ASIA CEMENT (CHINA) HOLDINGS CORPORATION Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.
Asia Cement (China) Holdings Corporation
亞 洲 水 泥（中 國）控 股 公 司
(incorporated in the Cayman Islands with limited liability)
(Stock Code: 743)
ANNOUNCEMENT OF UNAUDITED RESULTS FOR THE
NINE MONTHS ENDED 30 SEPTEMBER 2019
SUMMARY
The directors ("Directors") of Asia Cement (China) Holdings Corporation ("the Company") announce the unaudited consolidated results of the Company and its subsidiaries (the "Group") for the nine months ended 30 September 2019. This announcement is made as part of the Company's practice to publish its financial results quarterly and pursuant to paragraph 13.09 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited ("Listing Rules").
The unaudited consolidated profit attributable to owners for the nine months ended 30 September 2019 was approximately RMB2,240.3 million.
The Directors of the Company are making this announcement of the Group's unaudited consolidated results for the nine months ended 30 September 2019 in line with its practice to publish the Group's financial results quarterly and pursuant to paragraph 13.09 of the Listing Rules.
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CONDENSED CONSOLIDATED INCOME STATEMENT | ||||
For the nine months ended | ||||
30 September | ||||
2019 | 2018 | |||
RMB'000 | RMB'000 | |||
(Unaudited) | (Unaudited) | |||
Revenue | 9,182,320 | 7,889,189 | ||
Cost of sales | (5,280,605) | (4,938,242) | ||
Gross profit | 3,901,715 | 2,950,947 | ||
Other income | 164,272 | 81,993 | ||
Other gains and losses | (83,917) | (89,640) | ||
Distribution and selling expenses | (329,683) | (328,244) | ||
Administrative expenses | (335,984) | (217,339) | ||
Share of profits of joint ventures | 6,524 | 6,293 | ||
Share of loss of an associate | (2,021) | (111) | ||
Finance costs | (210,510) | (173,481) | ||
Profit before tax | 3,110,396 | 2,230,418 | ||
Income tax expenses | (813,779) | (578,074) | ||
Profit for the period | 2,296,617 | 1,652,344 | ||
Profit for the period attributable to: | ||||
2,240,317 | ||||
Owners of the Company | 1,598,480 | |||
Non-controlling interests | 56,300 | 53,864 | ||
2,296,617 | 1,652,344 | |||
RMB | RMB | |||
Earnings per share: | 1.430 | |||
Basic | 1.020 |
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CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at | As at | ||
30 September | 31 December | ||
2019 | 2018 | ||
RMB'000 | RMB'000 | ||
(Unaudited) | (Audited) | ||
NON-CURRENT ASSETS | 8,101,020 | ||
Property, plant and equipment | 8,598,033 | ||
Quarry | 163,461 | 163,974 | |
Prepaid lease payments | - | 701,095 | |
Investment properties | 89,730 | 89,730 | |
Goodwill | 554,241 | 554,241 | |
Other intangible assets | 3,551 | 3,991 | |
Interest in joint ventures | 53,436 | 49,045 | |
Interest in an associate | 514,544 | 16,565 | |
Restricted bank deposits | 2,725 | 1,421 | |
Deferred tax assets | 86,604 | 72,615 | |
Long term prepaid rental | - | 20,000 | |
Right of use assets | 842,598 | - | |
10,411,910 | 10,270,710 | ||
CURRENT ASSETS | |||
729,138 | |||
Inventories | 726,239 | ||
Trade and other receivables | 3,955,017 | 4,104,907 | |
Prepaid lease payments | - | 22,952 | |
Loan to related companies | 110,400 | 546,599 | |
Amount due from an associate | 15,927 | 11,257 | |
Amount due from a joint venture | 10,012 | 24,535 | |
Restricted bank deposits | 8,951 | 6,456 | |
Bank balances and cash | 7,575,217 | 5,008,691 | |
12,404,662 | 10,451,636 | ||
CURRENT LIABILITIES | |||
969,491 | |||
Trade and other payables | 988,260 | ||
Contracts liabilities | 290,222 | 136,355 | |
Amount due to joint ventures | 28,612 | 15,350 | |
Tax payables | 266,453 | 439,830 | |
Borrowings - due within one year | 5,057,795 | 2,475,485 | |
Lease liability - current | 7,134 | - | |
6,619,707 | 4,055,280 | ||
NET CURRENT ASSETS | 5,784,955 | 6,396,356 | |
TOTAL ASSETS LESS CURRENT LIABILITIES | 16,196,865 | 16,667,066 | |
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As at | As at | ||
30 September | 31 December | ||
2019 | 2018 | ||
RMB'000 | RMB'000 | ||
(Unaudited) | (Audited) | ||
NON-CURRENT LIABILITIES | 2,285,056 | ||
Borrowings - due after one year | 4,154,659 | ||
Lease liability - non-current | 109,642 | - | |
Deferred tax liabilities | 57,951 | 38,783 | |
Provision for environmental restoration | 34,701 | 31,278 | |
2,487,350 | 4,224,720 | ||
NET ASSETS | 13,709,515 | 12,442,346 | |
CAPITAL AND RESERVES | |||
140,390 | |||
Share capital | 140,390 | ||
Reserves | 13,216,388 | 11,947,519 | |
Equity attributable to owners of the Company | 13,356,778 | 12,087,909 | |
Non-controlling interests | 352,737 | 354,437 | |
TOTAL EQUITY | 13,709,515 | 12,442,346 | |
CONDENSED CONSOLIDATED CASH FLOW STATEMENT | ||||
For the nine months ended | ||||
30 September | ||||
2019 | 2018 | |||
RMB'000 | RMB'000 | |||
(Unaudited) | (Unaudited) | |||
Net cash from operating activities | 3,335,517 | 1,533,386 | ||
Net cash used in investing activities | (241,742) | (9,401) | ||
Net cash from (used in) financing activities | (527,249) | 824,654 | ||
Net increase in cash and cash equivalents | 2,566,526 | 2,348,639 | ||
Cash and cash equivalents at beginning of the year | 5,008,691 | 940,247 | ||
Cash and cash equivalents at 30 September | 7,575,217 | 3,288,886 | ||
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The Group's unaudited consolidated results for the nine months ended 30 September 2019 have been prepared in accordance with the same accounting policies adopted by the Group as disclosed in the last annual report for the year ended 31 December 2018.
The Directors do not recommend payment of a dividend in respect of the first nine months of 2019 (2018: Nil).
Business Review and Prospects
In the third quarter of 2019, with rising uncertainties in the international economic and financial environment, the global economic growth had slowed down. However, China's economic development displayed great resilience and much room for manoeuvre. The positive long-term development trend remained unchanged. The national economic development remained stable while making progress. The main economic indicators remained within a reasonable range, with continued improvement in economic structure and increase in favourable factors for high-quality development.
From January to September 2019, the national fixed assets investment increased by 5.4% year-on-year, which was basically the same as that of the same period last year; the national infrastructure investment increased by 4.5% year-on-year, representing an increase of 1.2 percentage points over the same period last year; the property development investment in China increased by 10.5% year-on-year, representing an increase of 0.6 percentage points over the same period last year; the national cement production volume amounted to 1.69 billion tonnes, representing a 6.9% year-on-year increase, representing an increase of 5.9 percentage points over the same period last year.
The central and downstream region of the Yangtze River and the Sichuan province are the two major markets in which the Group operates. The situation of the two markets in the third quarter of 2019 is as follows:
- In July, due to continuous high temperature in the central and downstream region of the Yangtze River, there had been lack of work commencing at construction sites. Environmental protection departments punished illegal sand and gravel factories, resulting in tight supply of sand and gravel in the central and downstream region, which in turn increased demand sluggishness and caused enterprises' inventories to rise. As a result, market prices gradually declined. In September, the market demand made a sharp rebound. Cement price showed a strong growth momentum after three upward adjustments and reached a level basically same as that of the corresponding period of last year. Market demand is expected to remain stable in the fourth quarter, while cement price is expected to stay at high levels. The Military World Games will be held in Wuhan in October, during which cement enterprises in the surrounding areas will carry out off- peak season production, and supply in eastern Hubei will be tightened.
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- In Sichuan, the price of bulk cement had remained stable due to the strict implementation of off-peak season production. Influenced by the import of low-priced bagged cement from Gansu and Guizhou, the price of bagged cement in Deyang and Jianyang in the outer areas dropped in July. It is expected that when the peak season in the fourth quarter arrives, the sales of cement from other provinces will shrink and the price of bagged cement in local areas will stabilize and rise.
From January to September 2019, the sales volume of cement products of the Group amounted to 22.9 million tonnes, which was basically the same as that of the same period last year. The Group generated a net profit of RMB2.30 billion, representing a significant year-on-year increase of 39% (unaudited).
Looking into the fourth quarter, the Group is optimistic about the prospects of the cement industry, which can be mainly reflected in the followings:
- In terms of demand, as the Sino-US trade war continues, the focus of China's economic growth has shifted to the domestic market, and infrastructure investment plays an even more important role in economic growth, with increased investment in infrastructure to shore up economic weakness/increased efforts to shore up weakness in infrastructure. In the first half of the year, fixed assets investment in railway systems across China amounted to RMB322 billion, while in the second half, further investments of RMB478 billion will be made (source: China State Railway Group), showing a high investment level at the start of the year that will continue to rise. Recently, the National Development and Reform Commission initiated the "14th Five-Year Plan" for transportation in advance and the State Council issued the "Outline for the construction of a strong transportation network", which are conducive to the building materials industry and effectively stimulates cement consumption. The demand for cement will remain strong in the future.
- In terms of supply, with winter approaching, the off-peak season production of cement industry will enter the peak period, and the rectification efforts in relation to environmental protection will continue to increase. The supply of cement will be further suppressed, which will provide strong support for keeping cement price at high levels.
- Since 1 October, PC32.5 cement has been removed from the national standard. The industry launched cement such as M32.5, PP32.5 and PF32.5 as alternative products, which rendered the policy less effective than expected. However, bulk cement and high standard cement are still the main trend in industry development, and the proportion of high standard cement will continue to increase.
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All in all, the Group believes that cement demand will remain stable in the fourth quarter; it is expected that the sales volume of cement products will amount to 30.9 million tonnes for the full year of 2019, which is basically the same as that of last year. Benefiting from the market in equilibrium and price staying at high levels throughout the year, the Group is very optimistic about its overall profitability for the full year. In the future, we will continue to enhance efficiency, improve services, optimize management, fine-tune incentives, and strive to achieve better performance on the 70th anniversary of the Group.
By Order of the Board
Asia Cement (China) Holdings Corporation
Hsu Shu-tong
Chairman
Hong Kong, 28 October 2019
As at the date of this announcement, the executive Directors are Mr. HSU Shu-ping, Mr. CHANG Tsai-hsiung, Dr. WU Chung-lih, Mr. CHANG Chen-kuen, Mr. LIN Seng-chang and Ms. WU Ling-ling, the non-executive Director and Chairman is Mr. HSU Shu-tong, the independent non-executive Directors are Mr. TSIM Tak-lung Dominic, Mr. WANG Wei, Mr. LEE Kao-chao and Dr. WANG Kuo-ming.
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Asia Cement (China) Holdings Corporation published this content on 28 October 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 October 2019 08:36:08 UTC
