27 July 2017
Cemex shows steady performance in first half of 2017 27 July 2017
Mexico: Cemex’s consolidated net sales fell slightly to US$3.6bn year-on-year for the second quarter of 2017. However, on a like-for-like basis taking into account only ongoing operations and foreign exchange fluctuation, its net sales rose by 2%. This rise was attributed to positive currency variations in Mexico and the US, as well as higher sales volumes in Europe.
However, the group’s operating earnings before interest, tax, depreciation and amortisation (EBITDA) decreased by 8% to US$696m due to lower contributions from South, Central America and the Caribbean, Europe and Asia, Middle East and Africa regions, partially offset by higher contributions in Mexico and the US. Globally, Cemex sold 17.9Mt of cement in the second quarter of 2017, a 3% fall year-on-year. In the first half of the year it sold 33.9Mt of cement. Overall, Cemex’s net sales rose by 3% on a like-for-like basis to US$6.7bn in the first of 2017 and its operating EBITDA fell by 4% on a like-for-like basis to US$1.33bn.
“Our second quarter operating and financial performance was essentially in line with our expectations as of the first quarter: good results in Mexico, the US and Europe; increasing challenges in Colombia and Egypt, and to a much lesser extent the Philippines,” said Fernando A Gonzalez, chief executive officer (CEO).
By region, in Mexico Cemex’s net sales came to US$810m for the second quarter and US$1.53bn for the first half, a rise of 7% compared to the first half of 2016. In the US its net sales came to US$916m for the second quarter and US$1.73bn for the first half, a 1% fall year-on-year. In South & Central America and the Caribbean, sales brought in US$479m in the second quarter and US$958m in the first half, a fall of 6% on a like-for-like basis. In Europe the second quarter saw a 2% improvement in cement sales to US$934m, while the first half saw US$1.67bn of sales, a 3% like-for-like rise. In Asia, the Middle East and Africa, sales were US$327m in the second quarter and US$653m, a 7% like-for-like fall year-on-year.
Philippines: Holcim Philippines is set to invest US$54m over the next two years to expand capacity and brace for ‘cut-throat’ competition that it says has affected is profitability. In the first six months of 2017, Holcim Philippines’ net profit fell by 42.6% year-on-year to US$41.5m on the back of a 16.7% decline in net sales to US$344.2m. For the second quarter alone, its net profit slumped by 46.2% year-on-year to US$22.9m. The decline in income was attributed by the company to lower sales alongside higher production input costs. Nonetheless, the company said that it would continue to invest to raise its cement production capacity from 10Mt/yr to 12Mt/yr to support demand as the government rolls out its flagship infrastructure projects.
In a statement Holcim Philippines president and chief executive Sapna Sood said that the investment indicated the company's continued commitment to the development of the country and its customers. "Our investments ensure that Holcim Philippines will continue to provide a reliable supply of an essential building material as cement demand increases in the country as these projects come on stream," she said. "The company will invest US$54m in the next two years to add 2Mt/yr to its current cement capacity by the first half of 2019, particularly in La Union and Davao."
Boral applies for new grinding plant 27 July 2017
Australia: Boral Cement has ¬applied to the Environment Protection Authority (EPA) to run a 1.3Mt/yr cement grinding plant at Geelong in Melbourne, Victoria for 24 hours per day. The proposed facility would enable the company to unload from ships to be delivered to the production site via covered belt conveyors.
“The new site is directly adjacent to the wharf complex, which would allow efficient unloading of clinker from ships,” a Boral spokesman said when the company first raised the concept in late 2016. “Importantly, the site is also surrounded by other large industrial premises, meaning it is well separated and largely hidden from residential areas.” Boral has also proposed constructing new equipment, including an enclosed ball mill and covered store, outdoor product stockpiles and clinker unloading and delivery infrastructure.
EPA development assessments manager Tim Faragher said that Boral Cement required a works approval before starting any construction works on the clinker grinding mill. “Work approvals are ¬required for industrial and waste management activities that have the potential for ¬significant environmental impact,” said Faragher. The EPA now has four months to make a decision on Boral’s application.
Siam Cement Group downgrades forecast for 2017 27 July 2017
Thailand: Siam Cement Group has revised down its sales growth outlook for 2017 to 3 – 5 % from 5 - 10%, following an unexpected drop in cement demand in the first half of the year. The group's net profit in the April to June period was US$396m, a decrease of 17% year-on-year, on sales of US$3.2bn, unchanged from the same period of 2016.
"The cement market in Thailand slowed down more than we expected," explained Chief Executive Roongrote Rangsiyopash. Net profits in cement and building materials, one of its three core business units, slid by 29%.
Roongrote said that government infrastructure projects, which are being increasingly approved and going through bidding procedures, had not yet reached the stage of actually needing cement.
Domestic cement sales by volume were down by 7% year-on-year in the April-June period, following an earlier 7% fall in the previous quarter. Demand in all sectors, from the government, commercial construction and residential buildings, declined. "I hope that the latter half of the year will improve, but I am not sure that we can make up for the decline in the first half," added Roongrote.
Adding to the slow domestic market, other Association of Southeast Asian Nations (ASEAN) markets also saw sluggish cement demand, although Roongrote shrugged off concerns, saying that the slump had been caused by ‘temporary factors.’