Comprehensive review: In the first half of 2023, Jidong Cement realized an operating income of 14.486 billion yuan, a year-on-year decrease of 14.01%, a net profit attributable to shareholders of listed companies of -369 million yuan, a year-on-year decrease of 132.34%, a weighted average return on equity of -1.22%, a decrease of 5.00 percentage points over the same period last year. In the first half of this year, demand in the northern region recovered less than expected, and market price competition intensified significantly. Lower sales prices of cement and clinker led to a sharp decline in operating income and gross profit margin of Jidong Cement, the first loss in nearly five years.
Figures 1 and 2: Jidong Cement's operating income and net profit attributable to parent company in the first half of 2023 (unit: 100 million yuan,%)
Data source: cement big data (https://data.ccement.com/)
The price dropped to a new low.
Jidong Cement is the largest cement manufacturer in northern China, with cement as its main business, supplemented by clinker, hazardous waste disposal, aggregate and other businesses. In the first half of 2023, Jidong Cement sold 43.96 million tons of cement and clinker, up 14.4% year-on-year, and achieved sales revenue of 12.36 billion yuan, down 11.9% year-on-year. Aggregate sales totaled 15.95 million tons, up 15.4% year-on-year, and sales revenue reached 590 million yuan, up 11.8% year-on-year.
Regionally, sales revenue in North China reached 10.76 billion yuan, down 18.4% year-on-year, accounting for more than 74.2%, down nearly 4.0 percentage points from the same period last year. Sales revenue in Northwest, Southwest, Central China and other regions (Shandong) also showed a downward trend, ranging from 2.3% to 16.7%. Affected by the low base effect, sales revenue in Northeast China increased significantly, with a year-on-year increase of 52.2%, accounting for 6.6%, an increase of 2.9 percentage points over the same period last year, basically returning to the pre-epidemic level. In terms of
price, in the first half of 2023, the average sales price of cement and clinker in Jidong Cement was about 281 yuan/ton, down 22.96% from the same period last year, to the lowest level in the past five years. The average selling price of sand and gravel aggregate is about 37 yuan/ton, down 3.12% year on year, and the price change is relatively small.
On the whole, although Jidong Cement has actively strengthened and expanded its main business and achieved sales growth in cement clinker business, due to the overall demand shrinkage in the northern region, enterprises are generally facing inventory pressure, and the market price has dropped significantly, which has dragged down the revenue of Jidong Cement's main business. In addition, Jidong Cement Industry Chain Extension Strategy continued to advance, and aggregate sales and revenue increased significantly in the first half of the year.
Figures 3 and 4: Sales volume and selling price of cement, clinker and aggregate of Jidong Cement in recent five years (unit: 10,000 tons, yuan,%)
Data source: cement big data (https://data.ccement.com/)
Gross profit per ton halved. In the first half of
2023, the cost per ton of cement and clinker produced by Jidong Cement decreased slightly to 251.4 yuan/ton, a year-on-year decrease of about 10.6%, against the background of high prices of coal and other raw materials and fuels. However, whether compared with the same period in history or other leading enterprises in the industry, the overall production cost is still on the high side. At the same time, the sales price of cement and clinker fell much more than cost side, so the gross profit per ton of the main business of Jidong Cement dropped to about 29.7 yuan/ton, a year-on-year decline of 64.5%.
Due to the asymmetric decline in sales price and production cost of cement and clinker business, it has brought a greater negative impact on the company's profitability. In addition, the gross profit margin of hazardous solid waste disposal, aggregates and other businesses also declined to varying degrees, ranging from 2.8% to 7.3% year-on-year. Therefore, during the reporting period, the comprehensive gross profit rate of Jidong Cement decreased to 12.9%, which was nearly 10.8 percentage points lower than that of the same period last year.
Table 1: Comprehensive price of cement and clinker per ton of Jidong Cement in the first half of 2023 Cost and gross profit
Data source: Cement big data (https://data.ccement.com/)
The significant decrease in revenue and gross profit margin of Jidong Cement was mainly due to the decrease in cement and clinker prices, which led to the loss of Jidong Cement. In the first half of 2023, Jidong Cement realized a net profit of-369 million yuan, a decrease of 132.34% compared with the same period last year, and a loss in the first half of the year in the past five years.
Table 2: Main Operation Data
of Jidong Cement in the First Half of 2023 Source: Cement Big Data (https://data.ccement.com/)
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