Tokyo Cement Group (Tokyo Cement) has released its financial performance for the fourth quarter ending March 31, 2022, with revenue of Rs. 16,158 million reflecting year-on-year growth of 31%, from Rs. 12.373 million during the same period last year. Despite the revenue growth, Tokyo Cement’s sales volumes were down 11% from the fourth quarter of last year, due to a plant outage in one of the crushers and unavailability of raw materials. The group recorded a Rs. 2,531 million loss for the fourth quarter, the biggest contribution of which came from foreign exchange losses which amounted to Rs. 4,822 million.
Review of the year The comparison of the Group’s performance year on year compared to the previous year reflects the impact of significant increases in the cost of goods and shortages of raw materials due to the illiquidity of the dollar on the market. Tokyo Cement’s sales volume showed a marginal increase of 1% for the fiscal year, while revenue recorded a 22% year-on-year growth from Rs. 42,962 million to Rs. 52,477 million . The Group recorded a loss of Rs. 453 million for the financial year 2021/22, with the foreign exchange loss amounting to Rs. 5,050 million for the year.
Forex, rising costs and MRP impact During the quarter, the prices of all building materials rose sharply, reflecting the very volatile macroeconomic environment. Commodity costs have risen alongside world price spikes, compounded by increased freight rates due to higher oil prices and interest for longer credit terms of 180 days. In addition, constraints related to the establishment of letters of credit (LC) have led to equipment shortages. The price of the 50 kg bag of cement has been adjusted to reflect these cost increases accordingly,
1st January – Cement prices increased from Rs. 1,275/- to Rs. 1,375/-, due to increase in raw material costs and transport charges.
March 8 – The Central Bank of Sri Lanka (CBSL) floated the currency (previously pegged at Rs. 203/- against the USD), causing the Rupee to depreciate to Rs. 230/- against the USD , the same day.
March 12 – Official exchange rate depreciated to Rs. 260/- in USD and the cement industry raised the prices of a 50 kg bag of cement to Rs. 1,850/-.
April 1 – The official exchange rate rose to Rs. 299/- to the USD, causing a 50 kg bag of cement to increase to Rs. 2,350/-.
As of this article, the price of cement stands at Rs. 2,850/- as per the average exchange rate of Rs. 350/- to US Dollar.