Tokyo Cement June net up 38% as construction sector revives

tokyo super

Aug 19, 2016 – Cement manufacturer, Tokyo Cement PLC, saw its June quarter (1Q17) net profit increasing 38 percent year-on-year (yoy) to Rs.643.8 million amid strong top-line gains and better cost management, the interim financial accounts released to the Colombo bourse showed. The earnings per share (EPS) improved to Rs.1.93 from Rs.1.40.

The group turnover for the quarter rose 9 percent yoy to Rs.7.5 billion while cost of sales rose at a slower pace of 6 percent, allowing the group to post a gross profit of Rs.1.8 billion, up 20 percent yoy. The cement sales have risen with strong demand from Sri Lanka’s private and household sectors and state projects recommencing.

The government increased the price of 50kg cement pack by Rs.60 with effect from June 30, 2016 in line with the revisions to the value added tax (VAT). However, the implementation of VAT has been suspended by the courts but no reduction in cement prices has so far been announced.  Meanwhile, the group was able to keep its operational costs in check as distribution and administrative costs increased only 2 and 4 percent yoy, to Rs.680.3 million and Rs.267 million, respectively.

This boosted the group’s operational profit 42 percent yoy to Rs.883.5 million. The finance expenses rose only 2 percent yoy to Rs.128.8 million. The group’s short term borrowings in fact declined to Rs.2.7 billion from Rs.3.3 billion during the quarter.   However, the income tax paid for the period rose 237 percent yoy to Rs.119 million.   Four fully-owned subsidiaries and one 51 percent owned subsidiary operate under Tokyo Cement group.

The 51 percent owned subsidiary, Tokyo Super Aggregate Limited was a joint venture set up in 2015 to produce high quality manufactured sand and aggregates for concrete.  The group this month said it had a struck a deal with Japan’s Ube Industries Ltd. for technical support and import raw material to make high quality cement.

As at June 30, St. Anthony’s Consolidated held 27.5 percent of the issued shares of the Tokyo Cement while Japan’s Nippon Coke & Engineering Co. Ltd, the second largest shareholder reduced its shareholding to 20.3 percent from 22.95 percent within the 12-month period. Wasatch Frontier Emerging Fund, which was the fourth largest shareholder of the group as at March 31, 2016, with 5.1 percent stake, did not feature among the top 20 shareholders of as at June 30, 2016. However, the two investment funds of Carson Cumberbatch group, which were not among the top 20 shareholders of the group as at March collectively held 5.4 percent stake in as at June 30, 2016. Norges Bank, the world’s biggest sovereign wealth fund held 1.7 percent stake as the seventh largest shareholder.   –



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