16 May 2008. Kuala Lumpur, Malaysia. Cement manufacturer Lafarge Malayan Cement Bhd presented to its shareholders the company's results at the Annual General Meeting held today.
"Although cement demand was flat compared to 2006, the company recorded better earnings as a result of strong performance in all businesses except for ready-mixed concrete," said the Chairman,
The Group's revenue grew 4.6% to RM2.174 billion in the financial year ended 31 December 2007, boosted primarily by better domestic prices and higher export sales. Operating margin, meanwhile, improved from 11.5% in 2006 to 14.5% in 2007. Pre-tax profit expanded by 50% to RM317.6 million while net profit soared 64% to a record high of RM284.2 million. Earnings per share recorded strong growth at 21.0 sen, up 41%.
In line with the better results, the Board of Directors declared an interim dividend of 20.0 sen gross less 26% tax that was paid on 6 May 2008.
The 9% increase in the cement ceiling price announced by the Government in December 2006 compensated partly for the 40% increase in costs suffered by the industry over the past few years. However, the improved margin was also due to the management's relentless pursuit of operational excellence and cost control within the Excellence 2008 project, a cost reduction programme driven by Lafarge SA. Better plant performance resulted in higher production and enabled the company to increase its exports by more than 400,000 tonnes while still serving the domestic market.
The Company also released its Q1 2008 results yesterday. Revenue in the first quarter of 2008 increased by 10%, mainly due to the growth in domestic cement demand in Peninsular Malaysia. Pre-tax profit improved to RM66 million, compared to RM59 million in the corresponding quarter in 2007. Contributions from the higher revenue growth in the first quarter of 2008 were partly offset by the higher costs of fuel and materials.
Rising costs continue to remain an industry-wide challenge, with margins eroded by the significant increases in the prices of fuel (mainly coal), paper bags and other materials and possibly transportation. The impact of higher coal prices has not been fully reflected in the first quarter results due to the availability of cheaper stock and contracts. Following the market liberalisation of the steel industry, the Company expressed its optimism that the government will respond positively to the industry's request for a review of the cement price ceiling and the implementation of the proposed Automatic Price Mechanism.
NOTE TO EDITORS
About Lafarge Malayan Cement Berhad
Lafarge Malayan Cement Berhad (LMCB) is the leader in Malaysia's cement industry. Incorporated in 1950, it built the country's first cement plant in 1953. Today, LMCB is the parent of a group of companies in Malaysia and Singapore with core businesses in the manufacture and sale of cement, ready-mixed concrete and other related building materials. LMCB employs more than 1,500 people and operates a nationwide network of facilities that includes three integrated cement plants in Pulau Langkawi, Kanthan and Rawang, a grinding plant in Pasir Gudang and distribution channels by road, rail and sea. LMCB is proud to serve Malaysia for the past 58 years and is committed to the sustainable growth of the nation's building industry.
Additional information is available on the website at www.lafargemalayancement.com.
Lafarge is the world leader in building materials, with top-ranking positions in all of its businesses: Cement, Aggregates & Concrete and Gypsum. With 90,000 employees in 76 countries, Lafarge posted sales of Euros 17.6 billion and net income of Euros 1.9 billion in 2007.
Lafarge is the only company in the construction materials sector to be listed in the 2008 ‘100 Global Most Sustainable Corporations in the World'. Lafarge has been committed to sustainable development for many years, pursuing a strategy that combines industrial know-how with performance, value creation, respect for employees and local cultures, environmental protection and the conservation of natural resources and energy. To make advances in building materials, Lafarge places the customer at the heart of its concerns. It offers the construction industry and the general public innovative solutions bringing greater safety, comfort and quality to their everyday surroundings.
Additional information is available on the web site at www.lafarge.com.