Profitability recovers from first quarter loss
BBMG Corporation (2009), a leading building materials and property developer in the mainland, has managed to maintain profitability in its half-year results after a recording a small loss for the first quarter.
Interim profit however took a hit from higher operating and administrative costs despite revenues climbing by over a third.
For the six months to 30 June 2013, the company recorded a net profit attributable to shareholders of 1.3 billion yuan (HK$1.03 billion), a drop of 6.3 percent year-on-year.
Operating revenue however jumped 38.3 percent to 20.4 billion yuan (HK$16.1 billion) thanks to continued growth in revenues from all four of its business segments.
For example, the modern building materials and commerce and logistics segment recorded an operating revenue of 7.5 billion yuan (HK$5.9 billion), an increase of 148 percent year-on-year.
The cement and ready-mixed concrete segment however fared less well, recording a 3.4 percent increase in operating revenue of 5.49 billion yuan (HK$4.34 billion).
Operating costs however surged by 54 percent to 16 billion yuan (HK$12.6 billion) while administrative costs jumped by 37 percent to 1.37 billion yuan (HK$1.08 billion).
Company chairman Jiang Weiping said national demand for cement fell during reporting period.
“With intensifying market competition, there was a year-on-year decrease in both price and profit of cement in North China,” Jiang said in a press release.
BBMG is the biggest cement supplier in Beijing, Tianjin and Hebei.
For its property development segment, the aggregate contracted sales area during the reporting period was 953 thousand square metres, an increase of 117.5 percent year-on-year of which the contracted sales area for commodity housing, that is housing without government sales restrictions, jumped 114.4 percent year-on-year to 595 thousand square metres.
For affordable housing, that is economically priced housing that is subject to government sales restrictions, the contracted sales area was 358 thousand square metres, representing an increase of 122.9 percent.