Huaxin Cement (600801) Q2 2024 earnings summary

Executive summary

• Revenue for the first half of 2024 reached ¥16.24 billion, up 2.56% year-over-year, while net profit attributable to shareholders dropped 38.74% to ¥730.55 million due to lower domestic cement prices and sales volumes.

• Cement and clinker sales volume declined 4.9% year-over-year, but overseas sales surged 47.0%; aggregate and concrete sales volumes grew 41.60% and 34.25% respectively.

• Overseas business expansion continued, with new and upgraded production lines in Mozambique, Malawi, Zambia, and South Africa, supporting future capacity growth.

Financial highlights

• EBITDA for the period was ¥3.698 billion, down 1.88% year-over-year.

• Gross margin decreased by 0.73 percentage points to 23.65%, with cement, aggregate, and concrete gross margins at 20.71%, 47.41%, and 11.61% respectively.

• Basic EPS was ¥0.35, down 39.66% year-over-year; return on equity (ROE) was 2.49%, down 1.75 percentage points.

• Operating cash flow was ¥1.73 billion, down 18.64% year-over-year.

Outlook and guidance

• The company expects continued pressure on domestic cement demand and prices due to overcapacity and weak real estate investment, but aims to leverage overseas growth and integrated business segments to stabilize performance.