September 2024
Qatar National Cement profit slightly up 05 November 2015
Qatar: Qatar National Cement Company (QNCC) has reported that its profit for the nine months ending on 30 September 2015 was US$98.6m, compared to US$91.2m in the same period of 2014. This represents a year-on-year rise of 8.1%. Revenue for the nine months to 30 September 2015 was US$233m, compared to US$212m for the nine months to 30 September 2014, a rise of 9% year-on-year.
The company's gross profit for the nine months to 30 September 2015 was US$96.2m, compared to US$93m for the same period of 2014. QNCC's other income for the nine months to 30 September 2015 was US$10.8m, compared to US$6.5m for the same period of 2014.
Paraguay: Although the Paraguayan state-run cement company Industria Nacional del Cemento (INC) has announced that it has secured the supplyof 50,000bags/day and is importing cement from Brazil, local distributors are still voicing their discontent with the firm. They they claim that INC is lying about the volumes that it provides. They are also complaining that the cement it imports is of poor quality and that the cement coming into the country from Brazilian producer Votorantim is too expensive.
Additionally, they argue that the imported cement is just to compensate the lack of supply from INC. They specifically complained that there were practically no regular disbursements of cement over the week beginning 26 October 2015. They believe that there is a lack of clinker for cement production and that demand from the local market is not being covered.
The head of INC, Jorge Mendez, has categorically denied the claims, stating that the distributors are making objections due to the fact that a recent negotiation process between INC and them has come to an end. He stated that 270,000 bags were handed over to distributors during the aforementioned week, including around 45,000 bags of cement produced by INC, and over 20,000 bags from imports. He feels that the issue has arisen because a certain number of distributors do not like the fact that construction firms buy imported cement and that INC regulates cement prices. Mendez has also challenged claims that Paraguay's distributors are requesting more cement.
Tricky times in India 04 November 2015
The past week has seen several quarterly financial results from producers in the world's second-largest cement industry: India. So far, they do not make for a great read from an economic perspective, although some players, including Birla Group and Sanghi Cement are yet to show their hands.
So let's kick off. For the quarter that ended on 30 September 2015, LafargeHolcim subsidiary Ambuja Cements saw its net profit slide by 36% year-on-year to US$23.6m compared to the same period of 2014. Its income fell by 4% to US$324m as it battled a one-off charge. ACC, LafargeHolcim's other Indian subsidiary, saw a profit of US$17.5m for the quarter, a year-on-year fall of 40% compared to 2014. Not great for the global number one player.
Other players to announce so far have included JK Cements, which reported a 58% fall in consolidated net profit to US$2.1m. Meanwhile, Century Textiles, which owns Century Cement, fared even worse. It actually posted a loss compared to a marginal profit in 2014, despite an increase in total income.
It has not been all doom and gloom however. UltraTech Cement, while it reported a drop in profit, was not as badly affected as the firms listed above. It recorded a 3.9% fall to a net profit of US$59.7m for the quarter, down from US$62.3m in the same period of 2014. This was reported as being better than expected according to a senior research analyst at Angel Broking, perhaps hinting at shaky ground under even these results.
So far, the exception to the lower profits and losses has been India Cements Ltd (ICL), which posted an almost five-fold growth in its net profit. It profit grew from US$1.14m to US$6.26m, which it said stemmed mainly from improved operating parameters and substantial reductions in its variable costs. Its operating profit grew to US$35.4m from US$27.9m. It expects performance to improve as it increases its capacity utilisation rate up, currently languishing at just 60%.
Does the company provide a model for other producers to follow? Perhaps. The company's managing director and vice-chairman of ICL, N Srinivasan, said that the company was poised for improved conditions in its markets. In the company's results he said, "Going forward, we see better times ahead. We had a tough time for two years and have achieved a turnaround by cutting costs and maintaining a healthy cement price." The fact that ICL has managed to 'maintain a healthy cement price' in times of low requires scrutiny in a separate column.
However, a possible take-away from the results released so far is that the larger producers seem to have greater immunity to the problems surrounding over-supply in India. Economies-of-scale and the ability to spread risk around different Indian markets tends to favour larger players like UltraTech. Conversely, a smaller player that finds itself 'stuck' in one of the weaker regional markets, must just sit tight and weather the storm. Either that or it can make itself into a strategic acquisition target for one of the larger groups.
We are still awaiting results from other players in the Indian market, but with low demand, it would be foolish to expect them to be significantly different from the above. Given this, two key factors will help determine whether the decline in profits continues or not. Firstly, India's Modi government is promising large-scale infrastructure projects, which would help boost demand for cement. The industry has heard such promises in the past, however, and may chose to be skeptical. Secondly, it is important to remember that lower profits are being seen at the moment, even despite lower coal costs. Any upward change in these costs and the pace may become too fast for some of the country's smaller producers.
Gezhouba Cement to build cement plant in Kyzylorda 04 November 2015
Kazakhstan: Gezhouba Cement Group Co Ltd plans to construct a cement plant in Shiyeli, Kyzylorda with partner Corporation Dan Ake to form the joint venture, Gezhouba - Shiyeli Cement. Construction of the 1Mt/yr cement plant will begin in February 2016 and create 400 new jobs.
Gezhouba Cement said that the region has created favourable conditions for investors and the implementation of joint projects. "Gezhouba Cement is known not only in China but also abroad. It is included in the list of the best companies for the production of cement. On 23 December 2014 an agreement for the implementation of joint projects in Kyzylorda was signed. We are grateful to the CEO of Corporation Dan Ake, Daulet Turlykhanov, for having helped to attract investors. In addition, our side will create all the conditions for the realisation of the project," said region Governor, K Kusherbayev.
Philippines: Cement sales grew by nearly a fifth, or 18.6%, in the third quarter of 2015 on the back of increased consumer spending, according to the Cement Manufacturers Association of the Philippines (CeMAP).
CeMAP president Ernesto Ordoñez said that the country's total cement sales reached 6.4Mt in the third quarter of 2015, from 5.4Mt in the same period of 2014. The growth was attributed to the expansion of several infrastructure projects in both the public and private sectors, as well as the increased budget of the government for infrastructure projects. "The weather was also better this year compared last year, so that was also a factor," said Ordoñez, who also identified the upcoming Asia-Pacific Economic Cooperation (APEC) Summit as a sales driver. He is optimistic that cement sales will continue their upward trajectory for the rest of 2015.
Prism Cement’s net loss grew to US$5.08m in the second quarter of its 2016 fiscal year 04 November 2015
India: Prism Cement's standalone net loss widened to US$5.08m for the second quarter of its 2016 fiscal year, which ended on 30 September 2015, compared to a net loss of US$3.02m in the same period of 2014. During the period, its net sales grew by 4.56% to US$213m. Prism Cement sold 1.35Mt of cement and clinker compared to 1.29Mt during the same quarter of its 2015 fiscal year.
Prism Cement said that the short term scenario remains 'challenging,' however, government initiatives such as housing, 'smart cities' and the push to infrastructure aided by a stable inflation and rate cut bodes well for the medium and long term economic outlook.
Russia: Sibirsky Cement's cement plants produced about 3.15Mt of cement in the first nine months of 2015, down by 10% year-on-year. The Topki Cement plant produced 2.27Mt of products, a 6% year-on-year fall, Kransoyarsk Cement produced 621,100t, down 14% year-on-year, while Timlyui Cement made 261,900t, a 28% decline.
Vicat’s sales up by 1.9% in the first nine months of 2015 04 November 2015
France: Vicat's sales in the first nine months of 2015 grew by 1.9% year-on-year to Euro1.88bn. In the third quarter of 2015, its sales grew by 1.7% to Euro640m on a reported basis and declined by 3.7% at constant scope and exchange rates. Vicat reported robust business trends in the US, activity growth in Asia underpinned by Turkey and India, a reduced down-trend in France and lower activity in West Africa and the Middle East.
"Vicat's third-quarter performance still reflects a contrasting picture from one region to another, but there were signs of improvement in certain markets," said Vicat's Chairman and CEO. "Strong increases were recorded in the US and Turkey, while volumes in India returned to growth in a still favourable pricing environment, and, lastly, our production unit in Kazakhstan ran at full capacity in a market nevertheless affected by a strong currency devaluation. In France, the shortfall compared with 2014 declined significantly in the cement business over the past quarter and the market currently appears to be gradually stabilising at an historically low level for French cement consumption. Against this backdrop, Vicat remains focused on its objectives of maximising its cash flow and reducing its debt, while leveraging the efficiency of its manufacturing facilities, its geographical diversification and its strong positions in its local markets."
Jorge Mario Velasquez to become new Argos group President 04 November 2015
Colombia: As of 1 March 2016, the current President of Cementos Argos, Jorge Mario Velasquez, will be the new President of the entire Argos group in Colombia.
Velasquez, born in Bogota in 1960, will replace the retiring Jose Alberto Velez. Velasquez joined Cementos Argos in 1984 and, on his way up within the company, has served as General Director of Cementos del Nare, President of Cementos Paz del Rio and Vice President of Logistics at Cementos Argos. He became the latter's President in June 2012. Velez has said that the main challenges awaiting Velasquez are the integration of Odinsa into Grupo Argos, the consolidation of Pactia (the property fund established with Conconcreto) and the expansion of Cementos Argos and Celsia.
The India Cements’ net profit grew almost five-fold in the second quarter of its 2016 fiscal year 03 November 2015
India: The India Cements Limited (ICL) has posted a nearly five-fold growth in its net profit for the second quarter of its 2016 fiscal year, which ended on 30 September 2015.
Its net profit grew from US$1.14m to US$6.26m in the second quarter of its 2016 fiscal year. Growth mainly stemmed from improved operating parameters and substantial reductions in variable costs. Its operating profit grew to US$35.4m from US$27.9m. Cement capacity utilisation was at 60% and is expected to rise.
According to Managing Director and Vice-Chairman of ICL, N Srinivasan, the last three quarters have seen the company posting consistent profits, a development that Srinivasan said had resulted in the company seeing better times ahead. "We have remained on the profit track for three consecutive quarters. Going forward, we see better times ahead. We had a tough time for two years and have achieved a turnaround by cutting costs and maintaining a healthy cement price," said Srinivasan. "With expected the increase in cement demand in the southern states and Andhra Pradesh building its new capital city Amaravati, we hope that the company will do well in the coming years."