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UltraTech Cement shares first quarter 2021 results 29 July 2020
India: Aditya Birla subsidiary UltraTech Cement has recorded a net profit of US$122m in the three months to 30 June 2020, the first quarter of the 2021 fiscal year – down by 28% year-on-year from US$169m in the corresponding period of the 2020 fiscal year. Sales were US$975m, down by 33% from US$1.45bn.
The company said, “UltraTech has emerged stronger and well-prepared in the wake of the on-going Covid-19 pandemic. The total lockdown period from late-March 2020 to 1 May 2020 has been a huge challenge for all manufacturing industries. UltraTech has managed the crisis with a sharp focus on operational efficiencies. In the available 68 operating days during the quarter, the company kept a tight control on costs and cash flow and achieved an effective capacity utilisation of 60% across its network of 54 plants around the country.”
UltraTech said that it had already noted “better-than-expected pick-up in cement consumption in rural markets,” which it attributed to “measured steps towards economic recovery” by national and state governments.
Italy: Caltagirone Group subsidiary Cementir has recorded first-half revenues of Euro570m in the first half of 2020, down by 3.6% year-on-year from Euro591.9m in the first half of 2019. Net profit was Euro21.9m, down by 27% from Euro29.9m. The company sold 4.6Mt of cement, up by 6.3% from 4.3Mt, which it said was “mainly attributable to good performance in Turkey.”
Operating costs fell by 3.9% to Euro475m from Euro494m, which the company attributed to “cost containment measures implemented to deal with the impact of the pandemic.” The company said that, in spite of the contraction during lockdown periods in various markets, it was generally able to offset this with “a significant recovery in sales,” as in China, where increased infrastructure investments raised demand above pre-coronavirus outbreak levels following the return to cement production on 27 March 2020. The company reduced its debt by 30% to Euro281m from Euro399.
Cementir said, “With the current industrial perimeter, we expect to reach full-year consolidated revenues of approximately Euro1.2bn in 2020. Net financial debt is expected to be around Euro180m, including capital expenditure of around Euro60m. No substantial changes in the workforce are expected.”
Thailand: Siam Cement Group’s (SCG) sales revenue from its cement business fell by 6% year-on-year to US$2.82bn in the first half of 2020. However, its earnings before interest, taxation, depreciation and amortisation (EBITDA) grew by 5% to US$405m. The cement division of the group said that sales were hit by coronavirus-related lockdown measures. However, earnings benefitted from efficiency improvements and lower energy prices. Overall both sales revenue and earnings fell for the group across all business division in the reporting period.
US sales drive GCC performance so far in 2020 29 July 2020
Mexico: Grupo Cementos de Chihuahua’s (GCC) net sales rose by 5% year-on-year to US$424m in the first half of 2020 from US$404m in the same period in 2019. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 16.4% to US$127m from US$109m. Its US cement and ready-mix concrete (RMC) sales volumes increased by 3.6% and 17.2% respectively. However, Mexican cement and RMC sales volumes fell by 7.2% and 23.7% respectively. Although most of GCC’s sales came from the US, it said that Mexican sales were affected by negative currency affects and the local coronavirus-related lockdown.
"Increased concrete and cement volumes in the US demonstrate the construction industry's tailwinds and resiliency on the back of improved weather conditions. EBITDA growth, free cash flow generation and margin expansion reflected the successful execution of a comprehensive plan to reduce costs and expenses,” said Enrique Escalante, GCC's chief executive officer (CEO). He added that since the company was seeing market conditions ‘deteriorate’ and high levels of uncertainty that the company expected ‘additional challenges in the quarters ahead.’ As such it hoped for, ‘further economic stimuli from the governments, including a sizable infrastructure bill.’
China: China National Building Materials (CNBM) has shared plans for a restructuring. Under the new arrangement, its subsidiary Tianshan Cement will take control of China United Cement, North Cement, Sinoma Cement, South Cement, Southwest Cement and CNBM Investment. The reorganisation awaits internal negotiations and finalisation and regulatory approval.