KUALA LUMPUR (Aug 30): Lafarge Malaysia Bhd is expecting to remain loss-making this year, after the group reported a plunge in net loss to RM83.79 million for its second quarter ended June 30, 2018 (2QFY18), from RM44.09 million in the year-ago quarter, mainly due to sluggish demand for its products, despite flat revenue.

Revenue came in at RM532.20 million versus RM531.77 million in 2QFY17, as higher contribution from its cement segment was offset by lower revenue from its aggregates and concrete segments. 

It posted a loss per share of 9.9 sen for the quarter, versus 5.2 sen in 2QFY17, its quarterly results filing showed today. 

Lafarge said it incurred more losses during the quarter under review, mainly due to weak demand and intense competition for its cement division.

The situation was further exacerbated by the increase in coal and petcoke prices, and higher finance cost. In addition, it said its previous year's quarter had recorded a one-off gain on land disposal.

The weaker 2Q led to Lafarge's cumulative net loss for the first half of FY18 (1HFY18) expanding to RM152.53 million from RM93.02 million in the same period last year, though revenue only slid a marginal 1% to RM1.08 billion from RM1.09 billion.

Lafarge said it expects to be loss-making in 2018, as the domestic market condition is expected to remain challenging in 2HFY18, with softening demand for cement and concrete. This would be the group's second consecutive year in the red.

Excess capacity in the market continued to put downward pressure on selling prices, despite energy costs showing signs of further increase, Lafarge said.

“Demand for clinker in the export markets, however, is expected to be strong with improving prices, and our Langkawi plant is well-positioned to benefit from this.

“The group will continue its focus on cost reduction and further enhancing operational efficiency to cushion the impact of lower revenue and narrowing margin, but will remain in the red in 2018,” the filing added.

Shares of Lafarge closed 16 sen or 5.18% higher at RM3.25 today, valuing it at RM2.76 billion.