Tokyo Cement profit falls amid lower sales, price cuts

The largest cement manufacturer in the country, Tokyo Cement Company (Lanka) PLC saw its net profit for the quarter ended June 30, 2015 (1Q15) falling 13 percent YoY to Rs.466 million amid a slowdown in the top line.

Accordingly, the basic earnings per share weakened to Rs.1.40 from Rs.1.60.

The turnover during the quarter under review fell 2 percent YoY to Rs.6.91 billion, which could be attributed to the temporary halting of some of the mega public infrastructure projects by the January 8 government and the regulated price cut announced in the interim budget.

Following a proposal in the interim budget 2015, the regulated price of a 50 kilogramme cement bag was reduced by 6 percent with effect from 2015.

The cost of sales decreased 1 percent YoY to Rs.5.47 billion while the gross profits fell 5 percent YoY to Rs.1.44 billion. The other income fell 26 percent YoY to Rs.106.79 million.

The distribution expenses fell 7 percent YoY to Rs.666.59 million, which could be attributed to the administered fuel price cuts by the interim government.

The administrative expenses increased 15 percent YoY to Rs.257.43 million.

The operating profits decreased 13 percent YoY to Rs.621.87 million.

The finance expenses fell 11 percent YoY to Rs.126.41 million due to lower interest rates environment prevailing.

Long and short-term borrowings increased marginally to Rs.5.54 billion while the bank overdraft facility declined from Rs.296.51 million to Rs.254.343 million from 4Q15.

The retained earnings increased to Rs.7.55 billion from Rs.7.09 billion during the same period, resulting in total equity increasing to Rs.10.45 billion from Rs.9.98 billion.

Total assets marginally i ncreased t o Rs.19.85 billion from Rs.19.74 billion in 4Q15, with capital work in progress increasing to Rs.874.50 million from Rs.372.15 million.

The company recently announced its intention to construct a Rs.220 million factory, which produces manufactured sand with a 51 percent ownership.

St. Anthony’s Consolidated (Pvt.) Ltd owns 27.5 percent of the shares in Tokyo Cement, Nippon Coke & Engineering Co. Ltd owns 23 percent and South Asian Investment (Pvt.) Ltd owns 20.1 percent.