September 2024
Shree Cement reports 74% rise in Q4 net profit 15 May 2012
India: Shree Cement has reported a rise of 74% in its net profit to US$21.2m for the fourth quarter of the financial year 2011-12, which ended on 31 March 2012, compared to US$12.2m for the same period of 2010-11.
Shree's net sales rose by 43% to US$289m for the quarter, compared to US$203m in 2011. For the full financial year the company reported a rise of 27.3% in its standalone un-audited net profit to US$50m, compared to US$39m in the previous financial year. Net sales for the company also increased by over 31% to US$884m in 2012 compared to US$676m in 2011.
HM Bangur, managing director of Shree Cement, attributed the jump in profits to better capacity utilisation, increased sales and increases in other income streams thanks to legal action ruling in the company's favour. "Our capacity utilisation has been much better. In the fourth quarter of 2012 compared to the same period in 2011, cement sales increased by 30% in volumetric terms and instead of 25.7Mt, we have sold 33.5Mt," he explained.
Bangur expects growth to slow down in the financial year 2012-13 and he is optimistic about the surge in the sale of power. "The pace will definitely slowdown because the 30% growth rate is not easy to maintain. I expect the cement market to grow by 9% and the company to grow by 12% in volume terms." In the 2012-13 period Shree Cements forecasts that it will increase its capacity by 12.5-13Mt.
Bangur added that claims of cartelisation in the cement sector were unfounded and that the forthcoming judgement by the Competition Commission of India (CCI) on its investigation into the sector are eagerly expected.
Holcim makes cuts to save Euro1.25bn by 2014 14 May 2012
Switzerland: Holcim has launched a targeted cost-cutting programme aimed at increasing operating profit by at least Euro1.25bn by the end of 2014.
The aims of the 'Holcim Leadership Journey' programme include increasing its fixed cost savings, improving energy-efficiency, increasing the use of alternative fuels and raw materials, cutting logistics costs and reducing net working capital. The company said it expected to achieve a positive impact of at least Euro124m in 2012 and anticipated one-off costs of less than Euro167m to complete the programme. Holcim had an operating profit of Euro1.92bn in 2011, excluding one-off items of Euro312m.
Chief executive Bernard Fontana is known as a cost-cutter having launched a similar 'Leadership Journey' cost savings plan in his former role as head of Luxembourg-based stainless steel maker Aperam. Like other energy-hungry cement makers, Holcim has grappled with higher coal, diesel and oil prices, which have added to production and transportation costs.
Holcim said that reducing logistics costs would add an extra Euro208m to operating profit by 2014, while improving energy-efficiency and using alternative fuels should add Euro250m in savings. Improving customer focus, streamlining the procurement process and increasing fixed cost savings should bring in savings of some Euro791m. The company also said that it might make some selective divestments.
Molins operating new plant in Tunisia 10 May 2012
Tunisia: A new cement plant has begun production in the region of Rouissat Chbika in the governorate of Kairouan, Tunisia. It is a unit of the Tunisian-Spanish Company SOTACIB, a subsidiary of Spanish group Cementos Molins and has cost the company US$2890m. It has created 350 jobs and will produce 4000t/day once it is fully commissioned.
CRH reports on 2012 so far 09 May 2012
Ireland: Cement Roadstone Holdings plc (CRH) has released details of its trading in the first quarter of 2012. It reported that operations in the Americas had benefited from favourable early weather conditions and a firmer tone in construction markets in the US. In contrast, trading in its European operations in the first four months was affected by severe weather conditions in February 2012 and by the ongoing impact of volatility in Eurozone financial markets. Overall, cumulative like-for-like group sales to the end of April 2012 were 2% ahead of the same period of 2011, although earnings before interest, tax, depreciation and amortisation lagged behind 2011 due to the tough start in its European operations.
In Europe, poor weather conditions in February 2012, which saw an extended period of extremely low temperatures across continental Europe in contrast to a very mild 2011, impacted trading. This resulted in a like-for-like sales decline of approximately 6% for January and February 2012. The rate of decline moderated in subsequent months as weather improved to leave cumulative like-for-like sales at the end of April 2012 4% behind those of 2011.
Operations in Poland, Switzerland, Benelux, and Turkey were particularly impacted by the harsh conditions. Volumes in Poland have since recovered and were in line with 2011 by the end of April 2012, but volumes elsewhere have remained behind those a year earlier. In Ukraine volumes for the first four months were well ahead of 2011, while January-April 2012 volumes in Finland were somewhat behind 2011. Operations in those countries experiencing austerity measures (Ireland, Portugal and Spain) continued to face challenging market conditions. Overall, cumulative like-for-like sales for the Europe Materials division were slightly ahead of the first four months of 2011.
CRH's Europe Products division, which benefited to a substantial extent from the very mild winter in 2011, was in turn affected by conditions in 2012 with like-for-like sales down by 8% for the first two months. The subsequent recovery in March and April 2012 has been strong in Germany and Denmark but more muted in Benelux, France and Switzerland where weaker government expenditure and consumer confidence has dampened demand. Overall, underlying sales for the first four months of 2012 were 5% behind 2011.
CRH's businesses in the Americas benefited from unusually benign weather conditions in the early months of the year. Helped by this and by a firmer tone in overall economic activity in the US, the group's operations delivered a like-for-like increase of 11% in terms of sales for the first four months of 2012.
In the Americas Materials business division, favourable weather contributed to very strong like-for-like volume increases for the first four months. The Americas Products business operations also benefited from the good early weather with like-for-like sales some 12% ahead of the first four months of 2011. Within its portfolio, those businesses serving the repair, maintenance and improvement (RMI) sectors have shown the most strength to date in 2012.
CRH predicts that given normal seasonal weather in May and June 2012 it expects its overall EBITDA in the (less significant) first half of the year to be close to 2011, when EBITDA was Euro574m. With more positive US economic and construction prospects for 2012 mitigating a more cautious view on the outlook in Europe, CRH reports that, subject to no major financial or energy market dislocations, it expects overall like-for-like sales growth in 2012 and a year of progress for CRH.
Blame it on the weather - European results 09 May 2012
Five of the big European producers posted their first quarter results this week and the figures were frosty.
Mirroring the north-south fault-line tearing Europe's economies apart, Germany's HeidelbergCement, Switzerland's Holcim and France's Lafarge showed improvements in overall sales volumes for the first quarter. Italy's Italcementi and Greece's Titan saw total sales volumes fall.
Looking closer, the results revealed that Western Europe was a dead zone for everybody. Despite its restructuring, Lafarge's sales fell by 11% in the region for the quarter. Similarly HeidelbergCement's sales fell by 6%, Holcim's sales fell by 13% and Italcementi's sales fell by 11%. Titan, by contrast, posted a 4% decline in sales in its heartland in Greece and Eastern Europe. Unsurprisingly it attributed the fall to the collapse of the construction sector in the wake of the Greek debt crisis. Even the weather seemed to be against European production, with more than one report blaming an unusually cold February 2012 for the poor results.
As is usual for European cement news in recent years the action in the first quarter of 2012 was all elsewhere, and this is where new profits have been found for these European producers, specifically in Asia and the Americas. It's in these places that Lafarge, Holcim and HeidelbergCement have reported sales increases of 10% and above for the quarter. Unfortunately 'elsewhere' for Italcementi and Titan has included Egypt with all its ongoing political and economic uncertainty, and the US where demand is in a sustained slump.
Bruno Lafont, CEO of Lafarge, summed it up nicely: "Emerging markets continue to be the main driver of demand and Lafarge benefits from its well balanced geographic spread of high quality assets." In a bid to capture some of that spread, it was also announced this week that the Italcementi subsidiary, Ciments Français, is striving to acquire a 6.25% stake in West China Cement. No wonder!
Each of the five producers are continuing to find savings in Western Europe through restructuring efforts but how painful will it become before the market revives? Unfortunately HeidelbergCement's outlook is the most candid. "In the Western and Northern Europe Group area, HeidelbergCement expects further economic growth but a slight overall dip in demand and falling sales volumes in cement and aggregates." Yes, it's going to get worse. Let's hope it's a warm winter in 2013.
Cemargos appoints new chairman 09 May 2012
Columbia: Columbia's largest cement company, Cementos Argos (Cemargos), has named Jorge Mario Velásquez as its chairman.
A civil engineer with over 30 years' experience in cement, Velásquez replaces José Alberto Vélez, who remains at the head of parent company Grupo Argos. The changes are part of the company's ongoing corporate restructuring process, which includes splitting off non-cement assets to its investment arm, Inversiones Argos.
Holcim reports improvement in Q1 09 May 2012
Switzerland: Holcim has reported improved earnings before interest, tax, depreciation and amortisation (EBITDA) and better prices in all regions in the first quarter of 2012. Overall, Holcim achieved an operating EBITDA close that seen in the first quarter of 2011, with like-for-like operating EBITDA growth reaching 5.5%. Consolidated net sales increased by 2.2% to Euro4.0bn. In absolute terms, Asia Pacific ranked first with net sales of Euro1.83bn.
Holcim's net income of Euro96.6m was almost as high as the level reached in the first quarter of 2011 and the net income attributable to shareholders of Holcim Ltd rose by 1.2% to Euro8.3m.
Another positive development is the fact that Holcim was able to mostly pass on cost increases through higher sales prices in all segments and in all regions (except Africa and the Middle East). The company also reported that it had reduced its net debt by nearly 5% over the 12 months to 31 March 2012.
Consolidated cement deliveries increased by 6.2% to 35.2Mt due to good economic conditions in Asia and Latin America and growing demand for construction materials in North America, Africa and the Middle East. With shipments of cement up by more than 1.8Mt, Asia Pacific was well ahead in terms of volume, mainly due to India. Higher shipments also were achieved in the US, Thailand, the Philippines and Indonesia as well as in Russia and Azerbaijan.
However, in contrast to last year's mild climate, the harsh winter brought many construction sites in Europe to a temporary standstill in February 2012. Sales volumes decreased in this region in all of Holcim's business segments as a result, impacting on the company's first quarter results.
Holcim expects demand for building materials to rise in emerging markets in Asia and Latin America, as well as in Russia and Azerbaijan in 2012. A slight improvement for North America can also be expected. In Europe, demand should remain stable, provided that the situation is not undermined by further systemic shocks. In any case, Holcim says that will give cost management its closest attention and pass on inflation-induced cost increases. Holcim says that its approach to new investments will be cautious and that it expects that it will achieve organic growth at operating EBITDA level in 2012.
Camargo Corrêa details bid for Cimpor 09 May 2012
Brazil: Brazil's second largest construction group Camargo Corrêa has said it would offer cash to take over the Portuguese cement maker Cimpor and it would preserve the company's name and strategic outlook.
Camargo Corrêa's cement division, InterCement, has offered clarification on its bid, first announced on 30 March 2012. In a statement, Camargo Corrêa maintained its bid of Euro5.50/share to acquire the 67.1% of Cimpor it does not already own. However it added that it would pay, "in cash and immediately to all shareholders that adhered to the offer."
It said it would maintain the brand name of Cimpor, preserve its long-term strategic outlook and keep the company's decision-making offices in Portugal, as it tried to win over support for the takeover bid. In its initial response the takeover bid, Cimpor's board said that Camargo's bid was too low and lacked details on its plans for the company's future.
France: Italcementi subsidiary, Ciments Français, has agreed to acquire a 6.25% stake in West China Cement (WCC) becoming one of the main shareholders of the Chinese group.
The agreement foresees the sale to WCC of 100% of the share capital of Shaanxi Fuping Cement Company (Fuping Cement) acquired by the Italcementi Group in 2007 against the subscription of a reserved capital increase of WCC. Fuping Cement in turn also owns 35% of the share capital of Shifeng Cement acquired in 2010. Under this agreement, Ciments Français will own a 6.25% stake in the Chinese group, becoming the third largest shareholder of WCC. Ciments Français will be represented with one member on the Board of Directors of WCC.
The transaction is based on a valuation of Fuping equal to approximately Euro87m gross of the net financial debt of the company, approximately Euro26m of which will be deconsolidated. Ciments Français will underwrite 284.2 million shares of WCC at the price of Euro0.216/share.
WCC, a holding company listed in Hong Kong since 2010 with a current market capitalisation of approximately Euro780m, has a total production capacity of approximately 20Mt/yr in Shaanxi and Xinjiang, which will grow before the end of 2012 to 24Mt/yr produced in 15 cement plants (including Fuping Cement and Shifeng Cement). In 2011 WCC reported net revenues close to Euro380m and a net profit of approximately Euro80m.
The transaction, which is subject to the approval of the competent Chinese authorities, is expected to close by the end of the second quarter of 2012.
Titan’s losses mount in Q1 09 May 2012
Greece: Titan Cement has reported a widening quarterly loss after construction activity collapsed in the wake of the Greek debt crisis.
Titan's net loss for the first quarter of 2012 stood at Euro19.4m from Euro4.3m in the same period of 2011. Titan has been hit hard by a plunge in private housing investment and drastic cutbacks in public spending on infrastructure in Greece. Greek building volume contracted for a sixth consecutive year in 2011, shrinking to just a fifth of its size in 2005, the sector's last year of expansion.
"In Greece the uncertainty associated with the ongoing crisis and the worsening economic recession form a particularly challenging backdrop for private building activity," Titan said in a statement. The firm said it would continue cutting its operating costs and that it expected annual savings of Euro26m from a restructuring plan it launched in 2011.
Titan, which earlier in 2012 scrapped its dividend for the first time in 58 years, has been counting on growth in new markets such as north Africa and Turkey to offset the building slump in Greece. Yet, political crisis in Egypt has hurt its prospects there.
Titan's group sales declined by 11% year-on-year to Euro225.4m. Earnings before interest, tax, depreciation and amortisation (EBITDA) fell by 29% to Euro34 m.