Displaying items by tag: Adelaide Brighton

Australia: Adelaide Brighton’s Birkenhead cement plant has been criticised by a local environmental group for its dust emissions ahead of a review of its licence. The Port Adelaide Residents’ Environmental Protection Group has asked the plant to pay towards cleaning up dust emissions near to the plant as well as stricter controls of dust and noise, according to the Westside Weekly newspaper. The local Environmental Protection Authority (EPA) is reviewing the cement producer’s current licence, which expires at the end of October 2017. The EPA has released a draft licence including conditions requiring the cement company to produce management plans to address dust and noise levels.

Australia: Adelaide Brighton has announced a 10.9% year-on-year fall in net profit for the six months to June to US$54.4m, while revenues rose by 4.7% to US$569.2m. For the full year it expects underlying net profit to be in the range of US$148 - 157m. The company added that a surging property market and a healthy pipeline of infrastructure projects means that it is on the lookout for acquisitions in a bid to keep pace with demand and grow its market share. The company has already spent US$67.7m on bolt-on acquisitions so far in 2017.

“From a demand point of view on the east coast, it’s hard to be pessimistic,” said chief executive Martin Brydon to The Australian newspaper. Brydon said the company was pragmatic about the residential property market eventually cooling off, but any slowdown would not immediately affect the business. “Even if there was a significant drop in approvals or applications for housing, the pipeline is still there for the next 18 months,” he added.

The company also said it was likely to raise cement prices for a second time later in 2017 amid the robust conditions on the east coast, but declined to confirm the likely amount of the price rise. The price rise has been partly precipitated by strong demand but also by rising electricity prices, which remain a major preoccupation for the company. It is expected to spend an extra US$6.3m on electricity within 2017 than it budgeted for, due to unexpectedly high prices.

Australia: The Construction, Forestry, Mining and Energy Union (CFMEU) has expressed concern over contaminated cement produced at Adelaide Brighton’s Birkenhead plant. Several large construction projects around Adelaide have used the contaminated cement the union has told the Australian Broadcasting Corporation (ABC) News. Adelaide Brighton says it is investigating an issue with its bulk cement that took place at the plant between 7 April and 10 April 2017.

Several companies including Boral distributed the cement. Adelaide Brighton says it has reviewed the situation and taken action subsequently to minimise the effect. This has included disposing of a large volume of cement.

Australia: Adelaide Brighton has appointed Zlatko Todorcevski as a non-executive director. He has a Bachelor of Commerce (Accounting) and holds an MBA. He has worked for more than 30 years in the oil and gas, logistics and manufacturing sectors in Australia and overseas and has a background in finance, strategy and planning. He has previously held the position of Chief Financial Officer with BHP Billiton’s Energy business, Oil Search Limited and most recently at Brambles.

A couple of news stories from Australia this week give us a reason to look at the country’s cement industry. All the main producers have now released their preliminary reports for the second half of 2016, with the exception of LafargeHolcim, one of the joint owners of Cement Australia. Essentially, the picture is mixed from two of the three main producers - Adelaide Brighton and Boral - with falling sales revenues but growing sales in the east. In mid-2016 the Australian Industry Group Construction Outlook survey predicted that the infrastructure, commercial and residential sectors would start to recover in the second half of 2016 leading to an upturn in 2017, although falling mining and heavy engineering construction was expected to continue to contrast in 2016.

The local market is split in clinker production terms with most of the producers (relatively) concentrated in the south and east of the country. Cement Australia leads in cement production capacity with 2.8Mt/yr or 42% of the country's production base from two integrated plants. Adelaide Brighton then comes next with 2.3Mt/yr or 35% from three plants and Boral follows with 1.5Mt/yr from one plant since the closure of clinker production at its Waum Ponds Plant in Victoria in 2012. The cement grinding plant situation is more varied with Adelaide Brighton's Northern Cement plant in the Northern Territory and BGC Cement plant in Western Australia amongst the country's 12 units, according to Global Cement Directory 2017 data. This total also includes a few slag cement grinding plants such as the Australian Steel Mill Services' plant and the Cement Australia-Ecocem plant that are both in Port Kembla.

Adelaide Brighton reported that its sales volumes of cement were down in 2016 due to major declines in Western Australia and the Northern Territory. Here, volumes had fallen by around 20% year-on-year. Unfortunately, a revival in southern and eastern Australia in the second half of the year wasn’t enough to stem the tide of poor sales. Power supply issues in Southern Australia also caused disruptions at both the company’s own plants and at those of its customers, leading to reduced sales. The cement producer also said that its import volumes had fallen by 2Mt due to lower sales in Western Australia and the Northern Territory and that import costs had increased due to a drop in the value of the Australian Dollar. Adelaide Brighton's reliance on imports is interesting given that this week Semen Padang, a subsidiary of Semen Indonesia, announced that it had started exporting cement to Australia.

Meanwhile, Boral Australia said that its cement revenue had fallen by 3% year-on-year to US$95.3m for its first half to 31 December 2016. However, cement sales volumes grew by 3% driven by higher direct sales. It also noted that competition and energy costs had increased in the period. HeidelbergCement, the other joint owner of Cement Australia, along with LafargeHolcim, said that its operations in Australia had delivered solid development due to strong residential construction demand and strong demand on the East Coast that compensated for a weaker mining sector. LafargeHolcim confirmed this in its half-year report adding that road infrastructure projects had also helped. It also noted that benefits to its adjusted operating earnings before interest, taxation, depreciation and amortisation (EBITDA) had been accrued through energy savings and lower clinker import costs.

LafargeHolcim's financial results for 2016 are due later this week on 2 March 2017. Potentially they have big implications for the Australian cement market given the rumours that were swirling around a year ago about a potential divestment. Although the signs so far suggest that its subsidiary Cement Australia did okay in 2016, pressure elsewhere in the group might prompt a sale of its share. We discussed this issue in December 2015 but since then Adelaide Brighton publicly said it was working on an acquisition plan, including strategy on how to cope with any potential competition issues. All eyes will be on LafargeHolcim later in the week.

Australia: Adelaide Brighton’s financial results have been hit by disruptions to electricity supplies in South Australia. Closure of generation capacity in the region, a temporary closure of an interconnection in July 2016 and bad weather that led to disrupted supplies in September 2016 all caused higher electricity and gas prices, production loses at several plants and reduced sales to customers, whose own facilities were also suspended. The company’s profit after tax fell by 10.4% year-on-year to US$143m in 2016 from US$160m in 2015. Its sales revenue decreased by 1.2% to US$1.07bn from US$1.09bn. It blamed the decline on reduced cement demand in Western Australia and the Northern Territory.

Overall cement and clinker sales volumes fell by 4% in 2016 but this was mitigated by higher sales in New South Wales, Victoria and south-east Queensland. Low sales volumes, higher energy costs and import costs also hit cement margins. The cement producer expects volumes to improve in 2017.

Australia: Adelaide Brighton has raised concerns about a South Australia state plan to build housing and tourism facilities near to its Birkenhead cement plant in Adelaide. At a public meeting held by the Development Assessment Commission, a local planning body, the cement producer expressed its concerns that building more housing would create more complaints about the plant’s activities, according to the Portside Messenger newspaper. It added that the government should consider building buffers to reduce noise and dust pollution from the site. The local government wants to build a tourism development near Cruickshank’s Beach and the cement plant.

Australia: Adelaide Brighton Cement has signed a sales agreement with Beach Energy to supply processed gas for one year from its Mooba processing plant. Supply of the gas is expected to start on 1 January 2017 and it will replace the previous deal that the companies had for raw gas.

Australia: Adelaide Brighton has said its annual net profit is likely to fall in 2016 compared to 2015, mainly on the back of lower income from property deals. However, its management has offered an otherwise bullish outlook, with price rises looming for several key products.

Adelaide Brighton said it expects net profit for 2016 to be US$143-150m. The top end of the range would represent a 3.8% decline year-on-year. It reported that annual sales volumes of cement and clinker were likely to be below 2015 levels, but volumes of premixed concrete, aggregates and concrete products would be significantly higher than a year earlier.

For the first half of 2016, Adelaide Brighton reported a net profit of US$57.8m, a 6.7% decrease compared to the same period of 2015. After stripping out the impact of property transactions, the company's earnings were 7.8% higher year-on-year.

Australia: Adelaide Brighton says it has prepared for an acquisition of the operations of LafargeHolcim in Australia and New Zealand. Chief executive Martin Brydon confirmed the plans to The Australian newspaper. He added that the plan includes measures to cope with competition issues that could arise from the takeover. However, Brydon admitted that LafargeHolcim has not declared if it is actually selling its assets in the region.