Displaying items by tag: Results
PPC reports on its four months to 30 July 2019
29 August 2019South Africa: PPC has reported an increase in it earnings before interest, tax, and depreciation (EBITDA) of 5 - 10% for the four-month period to 30 July 2019 compared to a year ago.
Against a backdrop of subdued domestic demand and competitive pricing by importers (whose imports increased 22.0% year-on-year to 0.64Mt in the first half of 2019), the group has held gross debt at a similar level to that reported in March 2019, implementing its US$4.56/t saving initiative and a focus on its most profitable market segments, with sales reduced by 10-15% in the four months to 30 July 2019 compared with 2018.
PPC’s financial report states that South African cement producers have engaged the relevant authorities for a cement standards check.
Half-year update on China 2019
28 August 2019The publication of CNBM’s financial results presents a good opportunity to take stock of the Chinese cement industry in the first half of 2019. Looking at the big picture first, cement sales rose by 5% year-on-year to 1.03Bnt in the first half of 2019 from 0.98Bnt in the same period in 2018. Graph 1 below shows the sales over the last five years since 2014. Generally, sales are decreasing each year but there has been some variation in the half-year periods.
Graph 1: Cement sales in China, 2014 – 2019. Source: National Bureau of Statistics of China.
As the China Cement Association (CCA) pointed out in its summary for the first half of 2019, the cement industry ‘swelled in volume and price’ as industry efficiency grew but that the growth rate dropped ‘significantly’ compared in 2018. By region, as Graph 2 shows, variation can be seen between the south-east of the country where growth was slow or even fell compared to stronger performance elsewhere. Cement production increased by above 20% in Jilin, Shanxi, Shandong, Tibet and Heilongjiang and by over 10% in Hebei, Gansu, Tianjin, and Liaoning. However, it fell in Hainan, Beijing, Qinghai, Guizhou, Guangxi, Hunan, Guangdong and Ningxia. Most of these changes were attributed to either rising or falling demand for cement, except for Jilin where reduced imports from neighbouring provinces pushed up its demand. In most of these latter regions it attribute the decline to falling demand for cement.
Graph 2: Cement production growth by province in first half of 2019. Source: China Cement Association.
Other points of note from the CCA include the surge in imports to China. Imports of cement and clinker rose by 149% year-on-year to 8.97Mt in the five months from January to May 2019. Vietnam supplied 68% of this followed by 11% from Thailand. On the production side, 10 new production lines with a total capacity of 15.5Mt/yr were commissioned in the period. These were fairly scattered across nine provinces, in Shanxi, Anhui, Hubei, Fujian, Guangxi, Hunan, Guizhou, Gansu and Yunnan respectively.
Sales and profits were supported by growing demand and prices on the corporate side. CNBM’s operating income for its cement businesses grew by 16% to US$8.14bn from US$7.04bn. Its adjusted profit increased by 40% to US$2.76bn from US$1.98bn. Anhui Conch’s sales rose by 17.9% to US$2.15bn from US$2.11bn. It blamed poorer profits in the south of the country on adverse weather leading to weakened demand.
The weaker sales in the south could be seen in China Resources Cement’s (CRC) results with its turnover down by 6% to US$2.22bn from US$2.36bn. Likewise, its earnings before interest, taxation, depreciation and amortisation (EBITDA) dropped by 8.5% to US$820m from US$896m. The majority of its cement plants are based in Guangxi, Guangdong and Fujian. Jidong Cement was also reported as having received US$30m in subsidies from the government during the first half of 2019 in relation to its ‘daily activities.’
As is usual for these kinds of roundups the dynamic in China is between government industrial policies, like peak shifting and pollution mitigation, and local demand and price trends. One of the latest spins on peak shifting, for example, is a rating system that is being considered to decide which companies should be subject to production limits and for how long. General cement sales are slowly falling each year but the rise of imports into the word’s biggest cement producing nation (!) mark an interesting trend. Also, it may not be connected, but lots of those provinces with falling demand so far in 2019 are those on the south coast facing the heavy clinker exporting nations of South-East Asia. Given the decisiveness with which the Chinese government dispensed with imports of waste materials under its National Sword initiative since 2017, those countries importing cement to China should beware. It could change very quickly. The Chinese cement market is never dull.
CNBM shares interim results
28 August 2019China: CNBM have reported a good first half of 2019, with profits of US$1.23bn, an increase of 30.6% from US$0.94bn in the same period of 2019.
Adelaide Brighton’s half-year profit drops
28 August 2019Australia: Adelaide Brighton’s net profit in the first half of 2019 was US$37.0m, down by 35% from US$57.0m in the half year up to 30 June 2018. Chief executive Nick Miller told The Australian that Adelaide Brighton may consider a merger with Barro Group, which holds a 43% stake in the former.
Sinai’s losses increase year-on-year
28 August 2019Egypt: In a statement sent to EGX, Sinai Cement recorded first half net losses of US$11.3m, an increase of 20.1% on the US$4.00m recorded in losses in the same period of 2018.
Boral discloses its bad year to June 2019
27 August 2019Australia: Boral has suffered a decline in full year net profits of 38% to US$184m. This comes following USG-Boral’s statement regarding substantive changes to its gypsum dealings with Knauf.
Dangote and CCNN raise profits
27 August 2019Nigeria: Dangote Cement’s net first half profits have increased by 5.4% to US$329m from US$312m in 2018. The Cement Company of Northern Nigeria have reported a corresponding increase of 163% to US$40,000 from US$15,000.
Bamburi’s profits slump
27 August 2019Kenya: Bamburi Cement’s first half profits have declined year-on year by 96% to US$0.22 from US$6.99m. Its Building for Growth strategy has seen the topline hold steady amidst setbacks to demand, including higher operating costs and reduced uptake from the Standard Gauge Railway, one of numerous infrastructure projects impacted negatively by rising tensions between Rwanda and Uganda.
Misr Beni Suef’s first half profits plunge
23 August 2019Egypt: Misr Beni Suef Cement has reported net profits for the six months to 30 June 2019 of US$2.76m, down by 78.8% from US$13.0m in the same period of 2018. This is part of a wider profit slump for Egyptian domestic cement producers, with Misr Cement Qena’s first half figure down by 85.2% to US$0.87m from US$6.00m a year ago.
Anhui Conch’s net profits rise 17.9% year-on-year
22 August 2019China: The net profit of Anhui Conch Cement in the first half of 2019 was US$2.15bn, up 17.9% from US$2.11bn at the close of the first half of 2018. Anhui Conch’s interim report stated that the gross profit margin increased in the eastern and central regions by 2.67% and 0.51% respectively in response to steadily increasing market demand, and remained flat year-on-year in the southern region in spite of adverse weather precipitating a decline in the local market.