September 2024
Cementir profit rises by 3.1% to Euro103m in 2015 11 February 2016
Italy: Cementir Holding has reported that its profit rose by 3.1% year-on-year to Euro103m in 2015 from Euro100m in 2014. Its revenue rose by 2.2% to Euro969m from Euro948m. It attributed the growth to good performance of operations in the Scandinavian countries, Malaysia, Italy and Egypt.
“The Group ended 2015 with earnings before interest, taxation, depreciation and amortisation (EBITDA) in excess of the target of Euro190m. Improved performance in Scandinavian countries and Italy, plus the stable contribution of the Far East, offset the lower earnings in Turkey and Egypt caused by socio-political tensions across the Mediterranean and the Middle East, as well as the negative impact of the depreciation of some foreign currencies,” said Francesco Caltagirone Jr, Chairman and Chief Executive Officer of Cementir. He added that the group reduced its net debt to Euro222m in 2015.
The Italy-based building materials company produced 9.37Mt of cement in 2015, a decrease of 2% year-on-year from 9.56Mt in 2014.
Buzzi Unicem sales revenue rises by 6.2% to Euro2.66bn in 2015 11 February 2016
Italy: Buzzi Unicem has reported that its revenue rose by 6.2% year-on-year to Euro2.66bn in 2015 from Euro2.51bn in 2014. Clinker and cement sales volumes increased by 1.7% to 25.6Mt from 25.1Mt. It attributed the growth to market recovery in the US and Eastern Europe and an additional contribution from the Korkino cement plant in Russia.
Following a sharp drop in business during the first six months of 2015, the group reported that the recovery in international trade recorded in the second half of the year was weaker and less than expected, especially in mature countries. Subsequently, its growth in 2015 was half of its previous estimate. Construction activity in the last quarter of 2015 was bolstered by a dry and mild climate in Italy, Central and Eastern Europe allowing construction activity to remain at levels above the seasonal average.
The group’s net debt fell to Euro1.03bn in 2015 from Euro1.06bn in 2014. It expects from preliminary data that its earnings before interest, taxation, depreciation and amortisation (EBITDA) will be Euro470m in 2015.
Cemex: wrong place, wrong time? 10 February 2016
Cemex trumpeted last week that it had returned to positive net income for the first time in six years in its fourth quarter results for 2015. In effect the multinational building materials company was saying it is putting its house in order following taking on too much debt in the late 2000s. Similar reassuring noises have repeatedly been made as it has cut its debts down since that time.
The figure Cemex was shouting about this time was its controlling interest net income or the net income attributable to the controlling shareholder. It has risen to a gain of US$75m after being negative, or in loss, since 2010. In that year the sting from the financial crash in 2008 caused havoc and net sales for the company hit a low of US$14bn, having been at over US$20bn in the boom times of 2007 and 2008.
Meanwhile, the company has been steadily whittling away at its total debt reducing it down to just US$15.3bn in 2015. This is a massive figure given that its total equity was US$9.5bn in 2015.
By comparison, Lafarge was reporting a net debt of Euro9.3bn in 2014 compared to a total equity of Euro17.3bn. Its debt-to-equity ratio was far smaller than Cemex’s despite being perceived as the weaker partner financially going into the merger with Holcim in 2015. Unsurprisingly, it was news in August 2015 when Cemex refinanced a bank loan agreement for a US$15bn debt that was previously renegotiated in 2009. Everyone is watching Cemex’s debts keenly.
Against this financial backdrop Cemex’s cement business has been steadily producing fairly static levels of cement since 2009. It 2015 it has reported that it produced 66Mt. However, net sales fell in 2015 by 8% year-on-year to US$14bn, a disappointing result following sales growth since 2012. Fernando A Gonzalez, Cemex’s Chief Executive Officer, blamed it on a ‘challenging’ macroeconomic environment.
Notably overall net sales have been down in Mexico, Northern Europe and Central and South America in 2015. Although Cemex hasn’t released cement sales volumes, volumes fell by 3% in Northern Europe, 2% in its Mediterranean region and 4% in Central and South America in 2015. Thankfully, growth continued to pick up the US, bolstered by housing and infrastructure spending. The Philippines has remained a powerhouse in cement consumption in Asia.
Reviewing Cemex’s expansion projects in 2015 suggest muted capital expenditure with a focus on upgrades and side projects rather than clinker production growth. Such announcements included projects in Nicaragua, the Dominican Republic, Colombia and Mexico. The exception was in the Philippines where a full-on US$300m project including a new 1.5Mt/yr plant was announced in May 2015. Given the surging cement volume sales in the country this is likely a safe investment.
As discussed previously in this column and elsewhere Cemex has suffered from high debts at exactly the time its major international rivals have started to merge. At the same time its Chinese rivals in terms of production capacity have undergone similar capacity consolidation as part of state mandated capacity reduction initiatives. This has left Cemex between the mega-cement producers like LafargeHoclim and HeidelbergCement and the up-and-comers such as Eurocement or Votorantim.
Now, its reliance on markets in the Americas it hitting a roadblock from reducing growth south of the US as global commodity prices tumble and economies suffer. It couldn’t have happened at a worse time for the company. Bar the odd bright spot such as the US and the Philippines it seems that all Cemex can do is wait it out.
Semapa cement sales grow by 11% to Euro477m in 2015 10 February 2016
Portugal: Semapa has reported that its cement sales grew by 11% year-on-year to Euro477m in 2015 from Euro430m in 2014. It attributed the increase to growth in turnover of operations in Portugal, Lebanon and Angola and the integration of the Supremo Group on 1 July 2015.
Earnings before interest, taxation, depreciation and amortisation for its cement business grew by 14.7% year-on-year to Euro85.4m from Euro74.4m in 2014. However, its pre-tax profit fell to a loss of Euro18.3m from a gain of Euro9.7m a year earlier.
The Portuguese industrial conglomerate noted that cement sales in Portugal rose by 3.4% year-on-year in 2015, the highest increase since 2008. In Lebanon it reported a 8.6% year-on-year drop in cement consumption in 2015. In Tunisia it reported a drop in cement demand in the second half of the year. In Angola it reported that cement consumption fell by 11.7%. Despite these market conditions its turnover in Lebanon and Angola grew in 2015.
In Brazil Semapa acquired the remaining 50% of the Supremo Group in June 2015, taking control of its 2Mt/yr production capacity. However, Semapa reported SNIC data that the Brazilian cement market has dropped by 9.2% in 2015.
Looking ahead, Semapa forecasts that the cement market is expected to drop slightly in 2016 but with growth in Portugal.
PCA say US Cement consumption to grow up to 5% in 2016 10 February 2016
US: Domestic cement consumption will grow by as much as 5% in 2016, according to a report from the Portland Cement Association (PCA). Edward Sullivan, PCA chief economist noted that the ‘the fundamentals of our economy are sound’ at the 2016 World of Concrete event.
"With the recently passed federal highway bill and continued net increases in new jobs, we see clear indications that positive growth will continue," said Sullivan. The PCA's Market Intelligence Group will release an updated report on US cement consumption in March 2016.
The PCA has launched a year of celebrations to mark the organisation’s 100th anniversary.
Boral profit grows by 23% to US$97.2m for half year 10 February 2016
Australia: Boral’s profit after tax has grown by 23% year-on-year to US$97.2m in the first half of its 2016 financial year. It reported a profit of US$80m for the same period in its 2015 period. It attributed the growth to a strong residential
market and growth in New South Wales (NSW) with cost cutting, price rises and slightly higher property earnings for its construction materials and cement business. Overall revenue fell by 4% year-on-year to US$1.6bn.
“The success of the first half is underpinned by a very strong residential construction market in NSW, a solid performance in South-East Queensland, further recovery in the US and a successful growth strategy in the gypsum business in Australia and Asia,” said Boral CEO and Managing Director Mike Kane
Boral’s cement business reported a 6% rise in external revenue to US$113m. Profitability was also aided by cost cutting inititaives including improved utilisation of assets and sourcing of raw materials and energy at lower cost.
Halla Waleed Al-Juffali appointed to board to Saudi Cement Company 10 February 2016
Saudi Arabia: Halla Waleed Al-Juffali has been appointed as a member of the Board of Directors (independent director) of the Saudi Cement Company. Her appointment is subject to shareholder approval. She replaces Waleed Ahmed Al-Juffali, who resigned with effect from 4 February 2016 due to health reasons.
Halla holds a Bachelor’s degree in Business administration degree, majoring in International Business, from the International University of America in London. She has been a director with Ebrahim Al-Juffali and Brothers and Walid Juaffali & Partners. Halla has previously worked as a business analyst for British, European and Chinese investment markets.
Sofiane Benmaghnia to be appointed CEO of Holcim Romania 10 February 2016
Romania: Sofiane Benmaghnia has been appointed as the Chief Executive Officer of Holcim Romania effective from 1 April 2016. He will replace François Petry, who has became the CEO of Aggregates Industries, the LafargeHolcim subsidiary in the UK, in December 2015.
Benmaghnia, aged 39 years, has been the general manager of Meftah Cement Operations, Aggregates & Concrete in Algeria since 2011. Previously, he was the Chief Financial Officer of Lafarge Betoane si Agregate in the Middle East for three years. He joined LafargeHolcim group in 1999 as financial analyst.
Beat Hess nominated as chairman of LafargeHolcim 10 February 2016
Switzerland: The LafargeHolcim Board of Directors has decided to propose Beat Hess as its new Chairman to its shareholders. The decision follows the announcement that the current chairman, Wolfgang Reitzle, has informed the Board that he will not stand for re-election at the Company’s May 2016 Annual General Meeting.
Reitzle cited other business commitments for his decision, including the Chairmanship of the Linde Supervisory Board. He was a key part of the successful merger between Lafarge and Holcim in 2015.
Hess, a Swiss national born in 1949, is currently Vice-Chairman of the Board, a Member of the Strategy & Sustainable Development Committee and a Member of the Finance & Audit Committee. He was elected to the Board of Directors of then Holcim in 2010. From 1977 to 2003, he was legal counsel and later General Counsel of the ABB Group. From 2004 until the end of 2010, he was Legal Director and a member of the Executive Committee of the Royal Dutch Shell Group, London and The Hague. He is also a member of the Board of Directors of Nestlé S.A. and of Sonova Holding AG.
Martin Kriegner to be appointed head of India for LafargeHolcim 10 February 2016
India: Martin Kriegner will be appointed Head of India for LafargeHolcim, effective on 1 March 2016. He will report to Eric Olsen, Group CEO and succeed Bernard Terver who has decided to retire. Kriegner is currently the Area Manager Central Europe,
Kriegner, an Austrian national, joined LafargeHolcim in 1990 and has previously held several senior leadership positions in the Group, including CFO and CEO of the Group operations in Austria as well as Head of Lafarge India and Regional President Cement for Asia. He graduated from Vienna University with a Doctorate in Law and obtained an MBA at the University of Economics in Vienna.
Bernard Terver joined the Group in 1994 and became member of the Senior Management in 2012. He was responsible for Ambuja Cements and ACC in India since 2014 and was appointed Head of India at LafargeHolcim following the merger.