Tokyo Cement sees demand recovery boost volumes

Tokyo Cement Group posted a sharp pickup in third-quarter revenue, riding a recovery in construction activity, though profitability came under pressure from pricing adjustments, higher input costs and the financial impact of recent expansion investments.

The cement manufacturer reported a turnover of Rs. 14.52 billion for the quarter ended December 31, 2025, up 25 percent from Rs. 11.64 billion a year earlier, supported by volume growth that outpaced the broader industry.

Profit after tax, however, fell to Rs. 332 million from Rs. 1.01 billion, reflecting a mix of lower selling prices, rising raw material costs compounded by currency depreciation, and higher depreciation and interest charges linked to capacity expansion in Trincomalee and the acquisition of a vessel to strengthen coastal distribution.

The quarter saw construction activity maintain strong momentum, with the Sri Lanka Purchasing Managers’ Index (PMI) for construction remaining elevated through October, driven by demand from hospitality, housing and condominium projects alongside regional infrastructure development. That trajectory was interrupted by Cyclone Ditwah in late November, which triggered flooding and landslides and caused an estimated US$ 4.1 billion in damage to buildings, agriculture and critical infrastructure, according to the World Bank’s GRADE assessment. Industry activity slowed through December due to cyclone-related disruptions and the holiday period.

Despite the rupee weakening about 6 percent against the dollar, macroeconomic conditions remained broadly resilient, supported by stronger revenue collection, tourism inflows and remittances. Export earnings rose 7 percent year-on-year to US$ 12.99 billion from January to September 2025, while remittances increased 20.7 percent to US$ 7.19 billion in the first eleven months, helping sustain both the primary fiscal surplus and the external current account surplus.