The years 2013 & 2014 will be remembered as the vintage years for the cement company. If you held stock in the company you would have enjoyed your highest dividend to-date at a whopping EPS of 2.12 in 2014. However this has cooled to lower than its 2012 eps albeit still in its expected range. The company’s labour productivity has improved albeit at the expense of trimming of staff numbers indicating cost control measures by the company in the advent of a known new entrant (acknowledge by the CEO in his letter to shareholders). On back of its greatest performance to-date in circa 2014 the company has being aggressive in managing its operating cash flow. Debt remains a non-issue for the company as its gearing is well below 5%.
The company remains highly influenced by the macro conditions therefore its strategy of product diversification and seeking out country markets looks certain to keep it bouncing for some time to come. Internally, they may have to look at their fixed cost component of their cost structure as its EBITDA cools due to fluctuations in sales.
For those seeking annual consistent growth in dividend it’s no buy in the medium term, however those seeking value growth, it’s a good buy.