Despite robust demand and cost efficiencies, price cuts and industry saturation pressure quarterly earnings; full-year PAT surges 43% on lower base and strategic savings
Tokyo Cement Group reported a Profit After Tax (PAT) of Rs. 663 million for the fourth quarter ending 31 March, down from Rs. 722 million in the same quarter last year. The marginal dip in earnings comes despite a 13% increase in sales volume, largely due to price reductions aimed at maintaining market share in an increasingly competitive cement market. Turnover for the quarter stood at Rs. 12.96 billion, slightly below last year’s Rs. 13.15 billion.
For the full financial year, however, the cement giant posted strong gains, with annual PAT climbing 43% to Rs. 3.46 billion, up from Rs. 2.42 billion the previous year. This significant improvement was underpinned by a lower-margin base in FY2023 and bolstered by strategic cost-saving measures, including optimised sourcing, currency appreciation, lower freight costs, and reduced finance expenses. Turnover for the year grew modestly by 1% to Rs. 50.1 billion, despite a 15% year-on-year increase in sales volumes, again reflecting price compression across the industry.
The cement sector as a whole saw a notable demand rebound, with national consumption rising from 3.96 million metric tonnes to 4.71 million MT year-on-year. The demand resurgence was attributed to a combination of latent post-crisis consumption and the low base effect of the previous year.
Yet, this recovery has come with shifting market dynamics. The entry of a new domestic grinding operator and the re-entry of multiple cement importers—enabled by relaxed import restrictions—has intensified price competition. Despite this, a higher share of local demand was met through domestically produced cement, underscoring the sector’s growing self-sufficiency and value creation within Sri Lanka.
Looking ahead, Tokyo Cement and the broader industry remain cautiously optimistic. Private-led construction, along with state infrastructure projects backed by international partners such as India, Japan, and China, are expected to support further demand recovery.
However, the outlook is clouded by global uncertainties, including volatile trade policies, regional conflicts, and escalating geopolitical tensions in the Middle East, Europe, and South Asia. These factors threaten to disrupt energy costs, trade routes, foreign exchange stability, and investor confidence, potentially stalling Sri Lanka’s fragile economic recovery.
Despite these risks, Tokyo Cement has reiterated its confidence in the country’s underlying economic fundamentals and remains committed to seizing emerging opportunities in the construction and infrastructure sectors.
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Tokyo Cement, Profit After Tax, Cement Industry