Displaying items by tag: Results
Cementir results adjust to business outside of Italy
09 November 2018Italy: Cementir’s sales and earnings have benefited from new assets in the US as well as good performance in Belgium and China. Its sales revenue rose by 4.8% year-on-year to Euro893m in the first nine months of 2018 from Euro852m in the same period in 2017. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) increased by 5.2% to Euro163m from Euro155m. Its cement sales volumes fell by 1.8% to 7.52Mt from 7.66Mt. However, these figures take into account the company’s sale of its Italian operations.
Francesco Caltagirone Jr, chairman and chief executive officer, said, “In the first nine months of 2018 the EBITDA benefited on the one hand from the contribution of the US by Euro12.3m and from the improvement in Belgium and China, on the other it suffered the deterioration of earnings in Egypt due to the curfew introduced in February 2018 and the resulting stop of all transport activities until May 2018, in Norway due to bad weather in the first quarter, and in Turkey due to the economic and currency crisis getting worse in the month of August.”
In March 2018 the company purchased a controlling stake in Lehigh White Cement in the US from HeidlebergCement. It operates the company with Cemex as a junior partner. In October 2018 Cementir, through its subsidiaries, acquired an additional stake in Egypt’s Sinai White Cement increasing its share to 71.1% from 66.4% for Euro3.8m.
Loma Negra rides weakening demand to grow earnings
09 November 2018Argentina: Loma Negra’s net revenue grew by 42.3% year-on-year to US$435m in the first nine months of 2018 from US$305m in the same period in 2017. Its adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 46.5% to US$113m from US$77.3m. Overall, its cement masonry and lime sales volumes remained stable at 5.1Mt but sales in Paraguay fell by 4.2% to 0.42Mt. Sales volumes fell in both Argentina and Paraguay in the third quarter of 2018.
Sergio Faifman, Loma Negra’s chief executive officer (CEO), said, “Our core Argentine Cement business, delivered both revenue growth and adjusted EBITDA margin expansion notwithstanding the challenging macro backdrop in the country in which our volume declined at a mid single-digit pace year-on-year in line with overall industry performance.”
The subsidiary of Brazil’s InterCement said that it is moving ahead with building a new US$350m production line at its L’Amalí plant. The new line will have a clinker production capacity of 5800t/day. The project is being built by China’s Sinoma International Engineering and it is expected to be completed by early 2020. Main equipment is expected to arrive at the site by the end of 2018 and the steel structure is under construction.
India Cements’ sales revenue stable in first half
09 November 2018India: India Cements’ revenue has remained stable at US$379 in the first half of its financial year to 30 September 2018. Its profit more than halved to US$3.01m from US$6.91m. The cement producer is currently appealing against allegations of cartel-like behaviour by the Competition Commission of India (CCI). In late October 2018 it said it was buying Springway Mining for the aim of eventually building a new cement plant in Madhya Pradesh.
Germany: Poor weather in the US and rising energy prices have reduced HeidelbergCement’s earnings so far in 2018. Its result from current operations before depreciation and amortisation (RCOBD) fell by 7% year-on-year to Euro2.23bn in the first nine months of 2018 from Euro2.41bn in the same period in 2017. Despite this, its revenue rose by 3% to Euro13.4bn from Euro13bn and its sales volumes of cement grew by 4% to 97Mt from 93.5Mt. By region, revenue rose in all regions except for North America, but RCOBD fell in Western and Southern Europe, North America and Asia-Pacific.
“Improved financial costs and lower taxes overcompensated weaker than expected results from current operations due to significant rainfalls in our core markets in the USA as well as a higher than planned energy cost inflation,” said Bernd Scheifele, chairman of the managing board of HeidelbergCement. He added that, “Due to the weaker operational development, we had to partially adapt our outlook for 2018. As a countermeasure we have initiated an action plan with focus on three levers: portfolio optimisation, operational excellence as well as cash flow and shareholder return.”
Buzzi Unicem sales up despite US weather woes
08 November 2018Italy: Buzzi Unicem’s net sales rose remained stable at Euro2.14bn in the first nine months of 2018 compared to Euro2.13bn in the same period in 2017. Its cement sales volumes grew by 3.1% to 20.9Mt from 20.3Mt. Its market in the US was strongly affected by unprecedented rainfall, notably in September 2018, and activity in Ukraine was also lower. Net sales in the US dropped by 61% year-on-year to Euro791m in the third quarter of 2018 and sales in Ukraine decreased by 9.7% to Euro63.6m. Sales rose in most other areas, with an emphasis on growth in Italy and Europe.
Titan Group’s turnover and earnings down on US market
08 November 2018Greece: Titan Group’s turnover fell by 3.7% year-on-year to Euro1.10bn in the first nine months of 2018 from Euro1.14bn in the same period in 2017. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) dropped by 8.2% to Euro196m from Euro215m. It attributed this to wet weather on the eastern seaboard of the US. It said that production ‘challenges’ at the group’s Florida operations forced it to increase imports to its terminal at Tampa to meet customer demand, although this lowered its margins.
Third quarter update for the major cement producers
07 November 2018HeidelbergCement is set to release its third quarter financial results later this week. In the meantime what can the results from the other major cement producers tell us?
Graph 1: Revenue from major cement producers, Q1 -3 2018. Source: Company reports.
The biggest of the big beasts, China National Building Material (CNBM), released its third quarter update last week. As usual for a major Chinese producer it was the expected story of continuing double-digit growth. Operating income up, profit up and little other information besides.
CNBM’s half-year report back in August 2018 had more information, revealing that cement production volume fell by 5% year-on-year to 143Mt in the first half of 2018 from 150Mt in the same period in 2017. This was pinned on ‘flat’ demand, increased pressure on environmental protection and rising costs of fuel and raw materials. As we mentioned at the time the state-owned company is attempting to cope with the aftermath of China’s great construction boom. National Bureau of Statistics (NBS) data shows that local cement sales dropped by 8% year-on-year to 158Mt in the first nine months of 2018. CNBM’s cement sales are likely to have dropped also so far in 2018 but continuing industry consolidation and/or the merger with Sinoma may save them. With this in mind note the lack of sales volumes figures from CNBM and Anhui Conch in Graph 2 below.
Graph 2: Cement sales volumes by major cement producers, Q1 -3 2018. Source: Company reports.
Of the other larger Chinese producers, Anhui Conch’s third quarter report was similarly sparse, sticking to the facts (revenue and profit up) and discussing in more detail a recent large-scale sale and purchase agreement with Jiangsu Conch Building Materials with a value of up to around US$230m. China Resources Cement is typically more verbose in its results releases. Its turnover and profits are also up so far in 2018 but it actually explained that cement and clinker prices had risen by 32%.
Outside of China, LafargeHolcim’s results were mixed in a direct year-on-year comparison but more favourable on a like-for-like basis. Net sales and cement sales volumes are growing slowly but recurring earnings before interest, taxation, depreciation and amortisation (EBITDA) fell very slightly. Growth in Europe and North America was countered by issues in Asia Pacific, Latin America and Middle East Africa. Chief executive Jan Jenisch was more optimistic than at the same point in 2017 with no talk of ‘lacking potential’ and more emphasis on ‘positive momentum.’
As for the others, both Cemex and UltraTech Cement are looking good so far. Growth in Mexico and the US has bolstered Cemex’s performance giving, it a 7% year-on-year boost to US$10.9bn in the first nine months of 2018. Cement sales volumes grew more slowly at 3%, although operating EBITDA remained flat. Part of this was down to poorer markets south of Mexico, notably in Colombia. UltraTech Cement is still looking good after its acquisition of Jaiprakash Associates’ plants in 2017 but earnings and profits have started to decline. The Indian market leader has blamed this on mounting energy and logistics costs coupled with local currency depreciation effects.
So, in summary, generally good news from the big producers, although issues are present in certain markets, notably South America. HeidelbergCement has already set the scene for its third quarter results with a warning that its earnings are down due to poor weather in the US and rising energy costs. Sales volumes and revenue are said to be ‘within expectations.’ Its Indian subsidiary, HeidelbergCement India, reported storming figures for its half-year to the end of September 2018 with double-digit growth across sales, sales volumes and earnings. Less reassuringly, its larger Indonesian subsidiary reported falling sales for the first nine months of 2018. All eyes will be on HeidelbergCement later in the week to see how this plays out.
Vicat’s nine months results benefit from French market improvement
07 November 2018France: Vicat’s cement sales rose by 1.8% year-on-year to Euro948m in the first nine months of 2018 from Euro932m in the same period in 2017. At constant scope and exchange rates it rose by 10.2%. Overall sales grew by 1.4% to Euro1.95bn from Euro1.92bn. The group’s sales volumes of cement rose by 3.1% to 17.4Mt from 16.9Mt.
“The group achieved healthy increases over the period in all our territories, except Switzerland and Egypt,” said the group’s chairman and chief executive officer (CEO) Guy Sidos. “In the third quarter, business trends held up well, despite a downturn in the economic and industry environment in Turkey, which was hit by the sharp depreciation in its currency. The acquisition of Ciplan in Brazil, a country with tremendous potential, reinforces Vicat’s strategy of sustainable growth, leveraging its high-quality assets and strong regional positions to generate cash flow.”
US: GCP Applied Technologies’ net sales from its Specialty Construction Chemicals division grew by 5.9% year-on-year to US$165m in the third quarter of 2018 from US$156m in the same period in 2017 due to higher volumes in its Concrete and Cement businesses. Overall, the company’s net sales rose by a similar percentage. It manufactures a range of additives for cement production under the Opteva and Tavero brands.
RHI Magnesita cement and lime market held back by China
06 November 2018UK: RHI Magnesita’s cement and lime business has been held back by reduced production in China. It also said that its on-going focus on pricing and quality, ‘against more commoditised competitors,’ had reduced its division’s performance in the third quarter of 2018. Overall the refractory products producer said that its had seen ‘good’ trading performance in the third quarter of 2018 following positive trends seen in the first half of the year.