Recently, cement listed companies have published reports for the first quarter of this year, and many enterprises have suffered losses. Yesterday, under the attention of cement people, Conch Cement handed over its first quarter business report card to the market, revenue growth outperformed the market, profits fell, what is the reason for the deviation between the two trends?
Increase income without increase in profit & nbsp; In the fourth quarter of
2022, Conch Cement's operating income stopped the downward trend since the second quarter of 2021, with a slight increase of 0.98% over the same period last year. In the first quarter of this year, Conch Cement continued to improve, achieving operating income of 31.368 billion yuan, an increase of 23.18% over the same period last year. However, compared with revenue, profit is dwarfed, net profit in the first quarter was only 2.551 billion yuan, down 48.2% year-on-year, close to halving, the two trends are seriously differentiated.
Figures 1 and 2: Conch's income but not profit
in the first quarter of 2023 Data source: Cement Big Data (https://data.ccement.com/)
Among the main profit indicators, the gross profit margin was 16.5%. Compared with the same period in 2022, it dropped by 14.85 percentage points, and the return on equity fell by 2%, only 1.38% in the first quarter of this year, down by 1.27 percentage points from the same period. The author believes that there are two main reasons for the sharp deviation between revenue and profit trends.
Table 1: Main Operating Data
of Conch Cement in the First Quarter of 2023 Source: Cement Big Data (https://data.ccement.com/)
under Marketization Strategy In the first quarter of
this year, the market demand gradually rebounded and the base of the same period was low, so the national cement output increased by 4.1% compared with the same period last year. However, due to the limited price rebound under the weak recovery of demand and the high base of last year, the average price of cement dropped significantly. According to the big data of China Cement Network, the average price of cement in the first quarter of this year was 421.6 yuan/ton, compared with 522.5 yuan/ton in the same period last year, and the price dropped by 100.9 yuan/ton, or more than 19%. In the past few years, Conch Cement lost a lot of market share, which dropped to 11.2% in 2021. In 2022, the company resumed its "market-oriented" business strategy, recaptured the lost market, and increased its market share by 0.5 percentage points throughout the year. The author predicts that under the market-oriented strategy, Conch will continue to increase its market share this year, and the growth rate of cement clinker sales in the first quarter is much better than national level. However , the sharp drop in cement prices has hit profits hard, and the price drop is the main reason for the large decline in profits.
Figure 3: In the first quarter of 2023, the average price of bulk cement in the national P. O of 42.5 dropped sharply (yuan/ton)
Data source: cement big data (https://data.ccement.com/)
Coal price drop is limited & nbsp; Since the beginning of
this year, under the continuous promotion of the policy of guaranteeing supply, the high-quality production capacity in the main coal producing areas has been continuously released, and the price of power coal has been falling under the sufficient supply. In the first quarter, the average spot price of power coal in China was around 1176 yuan/ton, a slight decrease of 58 yuan/ton compared with the same period, a decrease of 4.73%, compared with the cement price. Coal decline appears to be a drop in the bucket, the cost decline is difficult to cover the decline in cement prices, cement production costs are still high is the second factor in the decline in profits.
Figure 4: The price of thermal coal fell slightly in the first quarter
Data source: Cement Big Data (https://data.ccement.com/)
2023 Market outlook: Market share may continue to rise Profit improvement is facing challenges
. According to this year's business arrangement, the company plans to sell 307 million tons of cement clinker (excluding trade), an increase of 8.5% over the same period last year. It is expected that the company's market share will further increase. In terms of profits, this morning, the Bureau of Statistics announced the production profits of industrial enterprises in the first quarter. The profits of manufacturing industry above the scale and non-metallic mineral products industry decreased by 29.4% and 30.6% respectively compared with the same period last year. The profits of cement manufacturing industry are not optimistic. In addition, it is estimated that the new clinker production capacity will exceed 47 million tons this year. Cement prices are facing greater pressure under the background of weak recovery of industry demand, and the company's profit improvement may face major challenges throughout the year. (This article does not constitute investment advice)
浙公网安备33010802003254号