H share Anhui Conch Cement Co posted a 21.8 per cent jump in net profit to 170.07 million yuan (about HK$158.16 million) last year, driven mainly by a surge in sales volume. The result was in line with market expectations and the company's own net profit forecast of no less than 168 million yuan when it was listed last October. The mainland's largest cement-maker said sales volume of cement and clinker rose 23.9 per cent to 2.99 million tonnes. Turnover climbed 12.9 per cent to 761.7 million yuan. Fully diluted earnings per share were 17 fen, from 22 fen. A final dividend of two fen a share was declared. Chairman Guo Wensan said the company would benefit from the huge demand for cement - particularly medium- to high-grade cement - arising from Beijing's plan to boost infrastructure spending and reform the housing sector. Anhui Conch has an annual production capacity of six million tonnes and planned to sell five million tonnes this year. Mr Guo said profit growth might not match the pace of production growth. He said exports this year would decline as a result of the Asian crisis, but this would be compensated for by an expansion of market share on the domestic front. Overseas sales accounted for 22 per cent of total sales in value terms, but their prices were slightly lower than those in the domestic market. Director Guo Jingbin said domestic prices had been stable with a 5 per cent rise expected in the second half. He said the company should be able to meet its sales target this year, judging by orders on hand now. Mainland consumption of cement rose 6 per cent last year and was predicted to grow 10 per cent this year, he said. Chief accountant Da Jianguo said profit margins this year should be no less than 22.3 per cent, as seen last year, compared with 20.7 per cent in 1996. He said the company would consider a share placement to finance new projects, if needed. The company had 134 million yuan in cash and about 270 million yuan in short-term treasury bonds, which would be enough to buy the Tongling Hailuo Cement Co, which has an annual production capacity of 1.4 million tonnes of cement. It plans to complete the acquisition this year after paying a 10 per cent deposit, or 43.4 million yuan, for the consideration. The company has a gearing of 25 per cent.