Dongwu Cement (0695.HK) Q2 2024 Earnings Report

Dongwu Cement International Limited reported QQ2 2024 results with revenue of HKD 106.6 million, up 73.38% on a year-over-year basis, underscoring a volume or pricing uplift relative to the prior-year quarter. However, the quarter remained unprofitable on a gross and operating basis, posting a gross loss of HKD 7.81 million and an operating loss of HKD 31.57 million as cost of revenue exceeded revenue and fixed-cost absorption remained weak. Net loss widened to HKD 35.87 million, with an EPS of -0.065. EBITDA stood at a negative HKD 5.51 million, and the EBITDA margin remained deeply negative at -5.16%. The company also generated negative operating cash flow of HKD 55.18 million and free cash flow of HKD 61.16 million, signaling significant cash burn in the quarter. Balance sheet leverage remains evident: total debt of HKD 300.68 million, net debt of HKD 264.30 million, and debt to capitalization around 0.399, with a debt-to-equity ratio of 0.664. The liquidity position shows HKD 57.69 million of cash at period-end and a robust current ratio of 2.17, but liquidity is stressed by operating losses and heavy working capital needs (days sales outstanding ~76, days inventory outstanding ~204, and days payables outstanding ~75). Management commentary from the earnings call is not available in the provided data; as such, forward-looking guidance is not disclosed in this dataset. In the context of the Basic Materials/Cement sector, the quarter reflects cyclical volatility, competitive pricing pressure, and elevated input costs that weighed on margins despite revenue growth. Investors should monitor: (1) sustainability of revenue strength versus input-cost trends, (2) steps to reduce cash burn and de-lever the balance sheet, (3) any management guidance on demand recovery, cost optimization, and capital allocation, and (4) capital markets access given debt maturities and working-capital intensity.