Displaying items by tag: Colombia
Cementos Argos’ nine-months sales fall
12 November 2020Colombia: Grupo Argos subsidiary Cementos Argos has reported a 13% year-on-year fall in cement sales volumes to 10.7Mt in the first nine months of 2020 from 12.3Mt in the first nine months of 2019. As a result, revenues fell by 5% to US$1.85bn from US$1.94bn, “partially netted by the price improvements in Colombia and in the US, together with the Colombian peso devaluation.” Earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 3% to US$342m from US$353m. The company said that, “Volumes were affected by the hurricanes and intense rains in the US, together with the gradual recovery of the Colombian operations that still remain affected by the lockdowns.”
Chief executive officer (CEO) Juan Esteban Calle said, “We are proud of our company and our more than 7500 employees for their commitment and resilience navigating all the challenges generated by the Covid-19 crisis. We have been able to continue operating in a bio-safe way while significantly mitigating the impact of extended shutdowns in most of our operations and at the same time we have been taking advantage of all the opportunities that are arising from the improving market dynamics, contributing to the recovery of the economies and employment in most of our markets.”
Cemex Latam Holdings reports nine-month results
29 October 2020Colombia: Cemex subsidiary Cemex Latam Holdings (CLH) recorded net sales of US$571m in the first nine months of 2020 were down by 24% year-on-year from US$752m in the corresponding period of 2019. Operating earnings fell by 14% to US$69.0m from US$87.0m, while consolidated cement volumes fell by 20% to 3.92Mt from 4.89Mt.
Jesus Gonzalez, chief executive officer (CEO) of CLH said, “Our operations could run relatively normally during the third quarter in Colombia, Guatemala, Nicaragua and El Salvador, while restrictions impacted in Panama and to a lesser degree in Costa Rica.” He added that the company improved its operating earnings before interest, taxation, depreciation and amortisation (EBITDA) by 19% on a like-for-like basis to US$51m in the third quarter of 2020.
Cemex España requests authorisation for Cemex Latam Holdings bid
08 September 2020Colombia: Cemex España has requested authorisation by the Colombian Financial Superintendency (SFC) to make offers to buy the shares of all Cemex Latam Holdings shareholders with a view to taking over a 100% stake in the company. El Ceo News has reported that after receiving authorisation Cemex España must place a bid within five working days.
Colombia: Argos has supplied 220,000t of cement and 765,000m3 of ready-mixed concrete to the site of the 8500m-long Túnel de La Línea road tunnel in Quindío and Tolima Departments.
Colombia regional vice president Tomás Restrepo said, “We are proud to have participated as allies in the construction of this mega-work that represents a great milestone for the infrastructure of our country and Latin America. This was a project that represented great logistical and technical challenges that Argos has faced with commitment. We are sure that this strategic work of interconnection will contribute enormously to the progress of Colombia and its people. This reflects our high purpose to continue contributing to the construction of dreams that drive development and transform lives"
Cementos Argos is Colombia’s fourth most innovative company
24 August 2020Colombia: The National Association of Entrepreneurs and Dinero Magazine have named Cementos Argos fourth among 242 of Colombia’s most innovative companies. Chief executive officer (CEO) Juan Esteban Calle said, “This recognition fills us with pride and motivates us to continue to advance. We are convinced that it is possible to help materialise more dreams of housing and a better infrastructure for millions of people.”
Colombia: Cementos Argos’ says its sales volumes in the first half of 2020 were affected by coronavirus-related lockdown measures in Colombia and some countries of Central America and the Caribbean. These markets have since recovered gradually as quarantine measures were eased. Its revenue fell by 4.6% year-on-year to US$1.14bn in the first half of 2020 from 1.20bn in the same period in 2019. Cement and ready-mixed concrete (RMC) sales volumes declined by 15% to 6.79Mt and 19.9% to 4.05Mm3 respectively. Earnings before interest, taxation, depreciation and amortisation (EBITDA) dropped by 9.5% to US$200m.
“These results were driven mainly by the firm commitment of our employees in implementing the health and safety protocols and the saving initiatives contained within RESET (restart safe and healthy), together with the better-than-expected market dynamics particularly in the US and some of our markets in the Caribbean,” said Juan Esteban Calle, the group’s chief executive officer (CEO).
By region the group reported growing RMC sales and earnings, both on an adjusted basis, in the US in the second quarter of 2020. Cement volumes fell in the country, mainly due to lower cement sales volumes in the Northeast region, due to lockdown measures and reduced demand from the wholesale segment. In Colombia a complete national lockdown from the start of the second quarter reduced sales significantly. A mixed picture was presented in the Caribbean and Central America due to differences in government lockdown policy although overall sales and earnings were down.
Colombia: Cement production fell by 20.8% year-on-year to 4.88Mt in the first half of 2020 from 6.17Mt in the same period in 2019. Data from DANE, the Colombian statistics organisation, shows that local despatches fell at a similar rate. Production in June 2020 dropped by 4.7% year-on-year to 0.98Mt from 1.03Mt in June 2019. Local cement production hit a low in April 2020 when the government imposed coronavirus-related lockdowns.
LafargeHolcim reports return to normality as lockdowns end, despite punishing first half
30 July 2020Switzerland: LafargeHolcim says that net sales in each of its five regions ‘returned to prior-year levels by the end of June 2020’ following the easing of coronavirus-related lockdowns. Its net sales fell by 10.8% year-on-year to Euro9.95bn in the first half of 2020 on a like-for-like basis due to the ‘severe’ impact of the lockdowns on construction sites in several of its main operating countries. It also blamed negative currency effects for an additional fall in sales. Its recurring earnings before interest and taxation (EBIT) dropped by 22% to Euro1.11bn. Its net debt decreased by 15.8% to Euro9.91bn from Euro11.8bn. Cement sales volumes fell by 13.1% to 87.2Mt, aggregates by 6% to 114Mt and ready-mix concrete (RMC) by 18.6% to 19.2Mm3.
Group chief executive officer Jan Jenisch said, “Our half-year results demonstrate the great resilience of our business. I’m encouraged by our team’s agility to weather the storm with the rapid execution of our ‘Health, Cost & Cash’ action plan, effectively driving cost savings ahead of expectations, improving net working capital and delivering record free cash flow.” He added, “The peak of the crisis is behind us. We expect a solid second half of the year based on June’s full recovery, the trend of our order book and upcoming government stimulus packages.”
By region the group noted the most severe coronavirus-related disruption in Asia-Pacific despite China delivering a full recovery and growing sales volumes by the end of the second quarter. In Europe lockdowns in the UK and France had a particular impact and it said that, “volumes suggest a V-shaped recovery in June 2020 for the majority of markets, except in the UK.” Significant impacts were noted in Ecuador, Colombia and El Salvador in Latin America. Sales volumes declined in Algeria, Egypt, Iraq and South Africa in the group’s Middle East Africa region but Nigeria delivered a ‘resilient’ performance. Finally, North America was the groups best performing region with slight dips in cement and aggregate sales volumes but a rise in RMX and rising recurring EBIT. This was attributed to, “fast and effective cost management in the US.”
Colombia: Cementos Argos Colombia says that it has delivered facemasks and biosafety kits containing thermometers, floor charts and a digital health-monitoring app to 23,000 of its customers across Colombia. The company said that the initiative was undertaken, “In the hope of strengthening the commitment to the continuation of the sector operations in biosafety conditions, and the revitalization of the economy.”
Regional vice president Tomás Restrepo said, “At Argos, we have the firm intention of being the best allies to our customers. In this context it becomes more relevant than ever to work hand-in-hand for the health and wellbeing of our strategic allies and to contribute directly to the safe continuity of the construction, the recovery of the industry and the health of the economy.”
Update on South America
15 July 2020Data is starting to emerge from South American countries for the first half of 2020 and it’s not necessarily what one might expect. Countries had different trends in play before the coronavirus pandemic established itself and then governments acted in their own ways with mixed results. Here’s a brief summary of the situation in the key territories.
Graph 1: Cement sales in selected South American countries in first half of year, 2018 – 2020. Source: Local cement associations and national statistics offices. Note: Colombian data is for January – May for each year.
Brazil’s cement sector looked set to become the big loser as global events seemed poised to dent the recovery of cement sales since a low in 2018. This didn’t happen. The Brazilian national cement industry union’s (SNIC) preliminary data for the first six months of 2020 shows that sales grew by 3.7% year-on-year to 26.9Mt. This is above the growth rate of 3% originally expected. Indeed, the monthly year-on-year growth rate in June 2020 was 24.5%. SNIC is not wrong in describing this kind of pace as being ‘Chinese.’ All this growth has been attributed to the home improvement market as people used their lockdown time to renovate their homes, renovations and maintenance in commercial buildings during lockdown and growing work on real estate projects. The government’s decision to implement weak lockdown measures clearly helped the sector but this may have cost lives in the process.
SNIC’s president Paulo Camillo Penna pointed out that producing and selling cement could co-exist with fighting coronavirus. However, trends such as a slowing real estate sector, less large construction projects and mounting input costs are all seen as potential risks in the second half of 2020. What SNIC didn’t link to the wider fortunes of the local cement industry was the economic consequences of coronavirus. The World Bank, for example, has forecast an 8% fall in gross domestic product in Brazil in 2020 due to its coronavirus, “mitigation measures, plunging investment and soft global commodity prices.”
Peru, in contrast to Brazil, implemented a strong lockdown early in March 2020. Unfortunately, it didn’t seem to work as well as hoped possibly due to informal and structural issues such as reliance on markets, the informal economy and residential overcrowding. This means that production and sales of cement are significantly down without any public health benefit. Both production and despatches fell by about 40% to around 2.9Mt in the first half of 2020 with close to total stoppages in April 2020. In terms of coronavirus, Peru is at the time of writing in the top 10 worldwide for both total cases and deaths, behind only Brazil in South America. It should be pointed out though that Peru’s testing rate is reportedly high for the region and this may be making its response look dire in the short term. All of this is particularly sad from an industrial perspective given that Peru was one of the continent’s strongest performers prior to 2020. One consolation though is that the economy is expected to recover more quickly compared to its neighbours.
Argentina started 2020 with a downward trend in its local market. Cement sales had been falling since 2017, roughly following a recession in the wider economy. Throw in a strong lockdown and sales more than halved at its peak in April 2020. So far this has led to a drop of 31% to 3.83Mt for the first half of 2020 compared to 5.51Mt in the same period in 2019. Unfortunately, a recent spike in cases in Buenos Aires has led to renewed lockdowns in the capital. Due to this unwelcome development and the general economic situation Fitch Ratings has forecast an overall decline in cement sales volumes of 25% for 2020 as a whole.
Finally, Colombia’s cement production fell by 24% year-on-year to 3.90Mt in the first five months of 2020 from 5.14Mt in the same period in 2019. April 2020 was the worst month affected. The country’s lockdown ended on 13 April 2020 for infrastructure projects and on 27 April 2020 for cement production and residential and commercial construction. On 5 May 2020 Cementos Argos said that domestic demand was at 50% of pre-lockdown levels. Data from DANE, the Colombian statistics authority, shows that local sales fell by around a third year-on-year to 0.71Mt in May 2020 from 1.06Mt in May 2019.
Most of the countries examined above follow the pattern of reduced cement production and sales in relation to the severity of the lockdown imposed and the resulting intensity of the coronavirus outbreak. Stronger lockdowns suppressed cement production and sales in the region of 20 – 40% in the first half of the year as governments shut down totally and then released industry and commerce incrementally. The exception is Peru, which has suffered the worst of both worlds: a severe lockdown and a severe health crisis. Local trends have continued around this, like the recovery in Brazil in the construction industry and the general recession in Argentina.
SNIC’s president has said that making and selling cement needn’t be exclusive with public health measures. He’s right but Brazil’s surging case load is an outlier compared with most of its continental neighbours and the rest of the world. Cement sectors in countries with growing economies like Peru and Colombia are expected to bounce back quicker than those with stagnant ones like Argentina. The risk for Brazil is what its government health strategy will do to the construction sector in the second half of 2020.