Tokyo Cement 4Q sales soar amid construction sector recovery

Sales soared at Tokyo Cement Company (Lanka) PLC as the cement maker benefitted from a stronger rebound in housing and construction activities in the first quarter of 2021 which made the company to add more heft to its production.  

Sri Lanka’s largest locally owned cement manufacturer and the market leader in ready mix concrete generated sales of Rs.12.4 billion in the three months to March 31, 2021, the company’s fourth fiscal quarter, up by a robust 47 percent from the same period in 2020 as demand returned fast when the economy was on full steam leading up to the New Year holidays. 

Partly mirroring the company’s top line performance during the period, the local cement production during the first two months of the year through February 2021 rose by 14.4 percent to 725,000 metric tonnes, while imports fell by 21.6 percent to 471,000 metric tonnes compared to the same period in 2020 as a result of the cess imposed last year to incentivise local cement production. 

The total cement usage, both locally produced and imported, however slipped 3.1 percent to 1,196,000 metric tonnes from the same period in 2020, according to data available up to February end.

Despite the strong top line, the company’s profits at operating level fell by 25 percent to Rs.904.5 million due to higher cost of sales and the distribution expenses which nearly doubled from the same period last year. 

While the cost of sales rose by 61 percent to Rs.9.3 billion from a year ago, distribution expenses rose by as much as 95 percent to Rs.1.9 billion. 

Meanwhile, the company reported earnings of Rs.3.28 a share or Rs.1.32 billion for the January –March 2021 quarter compared to earnings of Rs.1.71 a share or 684.8 million for the same period last year as the company paid down sizeable amount of debt, bringing down its finance cost and it booked an income tax reversal of Rs.572.5 million. 

The company paid off Rs.5.3 billion worth of debt during the financial year ended Mach 2021. 

Meanwhile, for the financial year ended March 31, 2021, the company reported earnings of Rs.13.53 a share or Rs.5.4 billion compared to earnings of Rs.5.73 a share or Rs.2.29 billion a year ago. 

The company’s annual revenue rose by 20 percent to Rs.42.9 billion during the financial year. 

St. Anthony’s Consolidated (Pvt) Ltd had 27.5 percent stake in Tokyo Cement and South Asian Investment (Pvt) Ltd held another 20.1 percent, while Ube Singapore Holdings Pte. Ltd, the joint venture partner of the company had 10.0 percent stake by March end.