2018 Annual Results March 2019
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Company Overview
Company Overview Western China focus – Shaanxi, Xinjiang and Guizhou The largest Market leader in Southern cement producer in and Eastern Central Shaanxi Province by NSP Shaanxi production capacity Cement capacity: 29.2mt Shaanxi: 23.3mt Xinjiang: 4.1mt Guizhou: 1.8mt 100% NSP capacity. Matching Clinker/Cement volumes at each plant ◼ Southern Shaanxi core markets: Dominant market position ◼ Eastern Central Shaanxi core market: Access to Xi ’ an metropolitan ◼ market Xinjiang and Guizhou: Growth opportunities ◼ Well positioned to capitalize on West China development ◼ ◼ A key strategic cement asset in North West China 4
2018 Annual Results
2018 Annual Results Highlights Operational ◼ Regional operational metrics (2018) – Period-end installed capacity of 29.2mt (31 Dec 2017: 29.2mt) Central Shaanxi Southern Shaanxi Total – Cement sales volume of 18.1mt (31 Dec 2017: 18.7mt). Including clinker sales 18.2mt (31 Dec 2017: 19.1mt). Market ◼ Highly Competitive ◼ Limited Competition situation – Cement ASP ’ s of RMB314/t (31 Dec 2017: RMB248/t) 15.01 7.54 Cement 7.47 Financial ◼ Production – Gross Profit increase to RMB1,985.8m (31 Dec 2017: RMB1,185.9m) volume (mt) – EBITDA increase to RMB2,637.0m (31 Dec 2017: RMB1,875.3m) – Profit Attributable to Shareholders RMB1,159.4m (31 Dec 2017: RMB710.8m) High grade High grade – Net Gearing 26.0% (31 Dec 2017: 34.5%) High grade 66% 63% 70% – Cash & cash equivalents of RMB1,075.1m (31 Dec 2017: RMB1,452.4m) Product mix Low grade Low grade Low grade Further Developments ◼ 30% 34% 37% – The Group early redeemed USD80 million 5-year senior note in November and Average: 297 Average: 327 Average: 312 December 2018 302 317 334 287 303 – Four aggregates production lines with capacities of 7 million tons in total have 316 ASP been fully commissioned during 2018 (RMB) High grade Low grade High grade Low grade High grade Low grade 6
Financial Analysis and KPIs RMB Million Ended Ended Ended Ended (unless otherwise specified) 31 Dec 2018 31 Dec 2017 % 31 Dec 2018 31 Dec 2017 Cement Sales Volume 18.1 18.7 (3.2%) ASP/t (RMB) 314 248 Revenue 5,911.7 4,760.0 GP/t (RMB) 110 63 24.2% Gross Profit 1,985.8 1,185.9 67.5% EBITDA 2,637.0 1,875.3 40.6% Trade receivable 10 14 Turnover Days (4) Profit/(Loss) Attributable to 1,159.4 710.8 63.1% Shareholders Inventory 42 48 Turnover Days (5) Basic EPS (cents) 21.3 13.1 62.6% Trade payable Dividend (cents) 2.6 2.6 - 59 58 Turnover Days (6) Gross Profit Margin 33.6% 24.9% 8.7 p.pt EBITDA Margin 44.6% 39.4% 5.2 p.pt As at As at 31 Dec 2018 31 Dec 2017 Total Assets 12,392.1 11,671.9 6.2% Net Debt (1) 1,976.5 2,287.7 (13.6%) Net Gearing (2) 26.0% 34.5% (8.5 p.pt) Net Debt / EBITDA 0.8 1.2 (33.3%) EBITDA / Fixed Charge (3) 11.4 7.4 54.1% Net Assets Per Share(cents) 140 122 14.8% 1.Net debt equal to total borrowings, medium-term notes and senior notes, less bank balances and cash and restricted bank deposits 2.Net Gearing is measured as net debt to equity 3.Fixed charge means gross interest expenses. 4.365 day / (Turnover / Average trade receivable) 7 5.365 day / (Production cost / Average inventory) 6.365 day / (Production cost / Average trade payable)
Production Cost Analysis Production Cost Average Coal Cost (RMB mm) (RMB per ton) 800 4,500.0 -21.1% 3.5% 50.6% 4.8% 600 508 3,926.0 491 395 4,000.0 326 400 311 9.7% 3,574.1 200 6.2% 3,500.0 4.9% 3,285.3 0 5.5% 4.4% 2014 2015 2016 2017 2018 3,037.4 3,042.6 16.5% 5.0% 3,000.0 3.6% 4.7% Average Electricity Cost 18.1% 6.0% 6.2% 15.5% (RMB per kwh) 2,500.0 18.4% 15.6% 21.3% -3.5% -1.6% -4.5% 0.6 16.5% 0.43 0.5 0.423 0.40 20.5% 0.404 0.39 0.4 2,000.0 19.6% 0.3 19.0% 0.2 0.1 27.5% 1,500.0 29.0% 0.0 24.2% 19.0% 2014 2015 2016 2017 2018 20.5% 1,000.0 Average Limestone Cost (RMB per ton) 500.0 33.4% +4.9% -8.1% 30.4% 24.5% 26.0% 28.3% -11.4% 23.6% 20.0 17.3 17.2 16.4 15.8 14.0 15.0 0.0 2014 2015 2016 2017 2018 10.0 Raw material Coal cost Electricity cost Depreciation Labor cost Others 5.0 0.0 2014 2015 2016 2017 2018 8
Operations & Markets
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