Net income for the three months ended March 31 slipped to 408.9 million yuan ($59.9 million), or 0.23 yuan a share, from 450 million yuan, or 0.29 yuan, the company said in a statement to the Shanghai stock exchange today. Sales increased 12 percent to 5.2 billion yuan.
The result compares with a doubling of profit a year earlier when a construction boom in the world’s third-biggest economy boosted demand. Earnings suffered from a slump in new construction starts in Conch’s key markets, Sinopac Securities Asia Ltd. said.
“Cement prices weren’t very good during the quarter, especially in the eastern provinces,” Jay Zhou, a Shanghai- based analyst at Sinopac Securities Asia Ltd., said before the announcement. “Economic-stimulus building projects haven’t started yet, so they’re just suffering from lower demand from the real-estate sector.”
Shares of Conch closed unchanged at HK$47.45 in Hong Kong before the earnings statement. The shares have climbed 33 percent this year, compared with a 6.1 percent gain in the benchmark Hang Seng Index.
Cement prices may increase 10 percent in the second quarter from the prior three months, Executive Director Guo Jingbin said in an April 6 interview. Lower coal costs will help the company save 1.6 billion yuan in 2009, and the company has cut stockpiles of coal to 15 days from the norm of more than a month on expectations of reduced prices for the fuel this year, he said.
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