September 2024
Buzzi Unicem sales up despite US weather woes 08 November 2018
Italy: 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 2018
Greece: 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.
LafargeHolcim Paulding cement plant to build wind turbines 08 November 2018
US: LafargeHolcim plans to build three wind turbines at its Paulding cement plant in Ohio to power the unit. Jamie M Gentoo, chief executive officer (CEO) of US cement operations, said that using distributed wind energy at the plant would be a first for the company in North America.
Constructing turbines will begin in December 2018 in partnership with One Energy. The three Paulding turbines are expected to generate more than 12MkWh/yr and should eliminate the equivalent of more than 9000t/yr of CO2.
As part of a community outreach project in conjunction with the turbine build, LafargeHolcim will create three US$5000 Megawatt Scholarships (one per turbine for a total of US$15,000/yr) to be awarded each year the turbines are in operation. The Megawatt Scholarships will be awarded annually to local high school graduates pursuing a two-year or four- year STEM (science, technology, engineering and mathematics) degree. Additionally, One Energy will pay US$27,000/yr annually in local property taxes.
Kima to sell National Cement land to pay off debts 08 November 2018
Egypt: The Egyptian Chemical Industries Company (Kima) plans to sell the land belonging to National Cement within the next year. Chief executive officer (CEO) Emad el-Din Mostafa said that the bankrupt cement producer owns over 300 hectares of land, according to Arab Finance. Selling the assets is part of the Ministry of Public Business Sector’s strategy to pay the former cement producer’s debts including worker salaries. The sale is expected to generate up to US$39m.
Third quarter update for the major cement producers 07 November 2018
HeidelbergCement 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.
Proença de Carvalho resigns as president of Cimpor 07 November 2018
Portugal: Proença de Carvalho has resigned as the president of Cimpor. Three independent directors of the cement producer have also resigned, according to the Jornal de Negócios. The departures follow OYAK Cement’s acquisition of Cimpor’s assets in Portugal and Cape Verde from Brazil’s InterCement.
Noha Bakr appointed executive director of Cement Division at Federation of Egyptian Industries 07 November 2018
Egypt: Noha Bakr has been appointed as the executive director of the Cement Division at the Federation of Egyptian Industries (FEI). Bakr, who holds a PhD in International Relations and International Organisations, was educated at the American University in Cairo and at Cairo University, according to Arab Finance. He has held several government posts, including working as the Assistant to the Minister of International Cooperation, in charge of International Economic Cooperation with Canada and the Americas.
The cement division of the FEI was established in 2013 to develop cement production in Egypt. The division is a subsidiary of the Chamber of Building Materials at the Federation of Egyptian Industries.
Anne Lloyd appointed a non-executive director of James Hardie 07 November 2018
US: Anne Lloyd has been appointed as a non-executive director of James Hardie. Lloyd previously worked as chief financial officer (CFO) of Martin Marietta Materials for over 12 years from June 2005 until her retirement in August 2017.
She joined Martin Marietta in 1998 as Vice President and Controller and was promoted to Chief Accounting Officer in 1999. She was subsequently appointed Treasurer (2006 - 2013) and promoted to Executive Vice President in 2009. Earlier in her career, Ms Lloyd spent 14 years with Ernst & Young, latterly as a senior manager and client service executive for the natural resources, mining, insurance and healthcare industries.
US: Dorothy M Ables has been appointed to the board of directors of Martin Marietta Materials. With Ables’ appointment, the Martin Marietta board comprises 10 directors, four of whom have joined since 2016. She will serve on Martin Marietta’s Audit Committee.
Ables, aged 60 years, brings financial and operational experience to the Martin Marietta board. Most recently, she served as Chief Administrative Officer (CAO) of Spectra Energy from 2008 until her retirement in early 2017, completing a career of over 30 years at Spectra Energy and its predecessor companies. As CAO, Ables was responsible for information technology, human resources, support services and community relations. Prior to that, she held roles as Vice President of Audit Services and as Chief Ethics and Compliance Officer for Spectra, and as Senior Vice President and chief financial officer (CFO) for Duke Energy Gas Transmission. Ables began her career in the audit department of Peat, Marwick, Mitchell & Co, a predecessor of KPMG.
Ables currently serves as a member of the board of directors of Cabot Oil & Gas, where she is on the Audit and Compensation Committees. She also sits on the board of Houston Methodist Hospital Foundation. She graduated from the University of Texas at Austin with a Bachelor of Business Administration in Accounting.
Vicat’s nine months results benefit from French market improvement 07 November 2018
France: 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.”