Shares of China Resources Cement Holdings, one of the largest cement makers in southern China, fell 6.4 per cent to an 11-month low of $1.56 yesterday after the firm warned shareholders to brace for a substantial drop in interim earnings. Results due out by the end of September would reflect the corrosive impact of the tight supply and high price of coal, a major cost item in the production of cement and the semi-finished material, clinker, the company warned. 'The above factors have placed pressure on the company's sales volume and gross profit from cement with the result that the performance for the six months to June 30 is expected to be substantially worse than the comparable period in 2004,' it said. Cement making is one of the industries policymakers have targeted to combat irrational investments and cool down economic growth. Measures aimed at curtailing capital expenditure were escalated in the first six months of this year and resulted in markedly lower demand and prices for cement. The group's net profit was $45.2 million in the first half of last year. China Resources is not the only cement producer to fall victim to the macroeconomic measures. The National Development and Reform Commission said earlier this week that combined cement output growth for all manufacturers during the first half fell from 17 per cent to 7.4 per cent. The commission also said profits of mainland cement companies slipped 76.5 per cent to 1.75 billion yuan during the first half. It added that cement producers were hit by higher coal costs, which were at least 100 yuan more per unit in the first half. Cement prices spiralled downward, especially in eastern China where prices were down to about 200 yuan per tonne from about 400 yuan per tonne previously, it said.