Displaying items by tag: Outlook

Vietnam: Vicem recorded full-year sales of US$1.68bn during 2022, up by 17% year-on-year. The producer sold 27.5Mt of cement, down by 6.7% year-on-year. Export sales volumes declined more sharply than those on the domestic market. Vicem responded to the cost impacts of economic disruptions arising from the on-going Russian invasion of Ukraine by raising its cement prices. Nonetheless, its profit fell by 30% year-on-year to US$63.9m.

Vietnam News Summary has reported that Vicem is aiming to achieve sales growth of 4% year-on-year in 2023, to US$1.74bn. Export sales growth prospects are strong, since China resumed its import of foreign goods at the end of December 2022. China consumed 54% of all Vietnamese cement exports in 2021.

Pakistan: Lucky Cement commenced clinker production from a new 3.15Mt/yr kiln line at its Pezu integrated cement in Khyber Pakhtunkhwa in late December 2022. This latest expansion increases the producer’s domestic production capacity by 26% to 15.3Mt/yr, from below 12.2Mt/yr earlier in 2022. The company also operates cement plants in Democratic Republic of Congo and Iraq with an additional capacity of 4.4Mt/yr.

The International News newspaper has reported that Lucky Cement anticipates domestic cement demand to grow due to the rebuilding of homes destroyed by flooding in 2022.

Vietnam: Vietnam National Coal and Mineral Industries Group (Vinacomin) has forecast 6.1% three-year growth in national coal demand to 115Mt in 2025 from 108Mt in 2022. Four main industries – cement, fertilisers, metal and power generation – are expected to retain over 90% of the combined share of domestic consumption. Vinacomin expects national coal production to increase by 1.3Mt/yr over the period, retaining a 40 – 45% stake in the domestic market. Five-year consumption of imported lignite is forecast to rise to 70 – 75Mt throughout the period up to 2026.

Chile: A fire at Sites 1, 2, 3 and 5 of Puerto Ventanas port in Valparaíso Region has disrupted clinker transportation to Melón’s Puerto Ventanas cement plant. The La Tercera newspaper has reported that the fire destroyed a clinker conveying system connecting the port to the cement plant. The producer expects the damage to ‘significantly impact’ its cement production capacity for a period which it is ‘not yet possible to specify.’

Melón said, “We have deployed contingency and operational continuity plans in order to ensure our supply to our customers." It added that it could not yet quantify the ultimate impacts on its assets, liabilities or results.

Kenya: Bamburi Cement says that it expects its full-year earnings before interest, taxation, depreciation and amortisation (EBITDA) to fall by 25% or more year-on-year during 2022. The Kenyan Wall Street newspaper has reported that the producer attributed the anticipated decline to increased energy costs and reduced cement demand.

During 2021, Bamburi Cement recorded a turnover of US$338m and a profit for the period of US$11.3m.

UK: Breedon Group says that it recorded 10-month sales of Euro1.38bn so far in 2022, up by 14% year-on-year from the same period in 2021. The producer completed scheduled maintenance on Kiln 2 of its Hope cement plant in the UK on time and on budget. Throughout the period, it noted 'supportive' trading conditions, with 'resilience' from the majority of its markets in its Great Britain and Ireland regions. In the year's second half to date, Breedon Group's four-month sales grew by 16% year-on-year. The group said that it is on track for record full-year earnings in 2022.

CEO Rob Wood said “Visibility in the trading landscape has been poor for some years now, for a variety of reasons. Against this constantly changing backdrop, our team’s commitment and resolve have delivered quality products and great service to our customers, regardless of the economic or political landscape. For this, we thank them. Their focus and determination in turn continues to deliver for all our stakeholders.” Wood continued “This time last year, we reminded our investors of the agile and entrepreneurial DNA that sets Breedon apart. Our rapid response to changing market conditions, local focus, vertically-integrated business model and disciplined financial framework will again enable us to deliver record results in 2022."

Ireland: CRH's consolidated sales were US$24.4bn during the first nine months of 2022, up by 13% year-on-year from nine-month 2021 levels. Regional sales grew by 18% in the group's America's Materials business, with a 12% rise in cement sales there, despite a drop in volumes. Elsewhere, for the Europe Materials business, sales remained level year-on-year, and higher pricing offset costs growths in all key markets except Asia and Europe West. The producer's consolidated earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 14% to US$4.2bn.

For the full year 2022, CRH expects to record a profit before tax greater than that of US$3.1bn recorded in 2021.

Chief executive officer Albert Manifold said ‘‘Notwithstanding a challenging and volatile cost environment, I am pleased to report further growth in sales, EBITDA and margin during the first nine months of the year. This performance reflects the resilience of our business and the benefits of our integrated and sustainable solutions strategy. The strength of our balance sheet, combined with our relentless focus on disciplined capital allocation, provides further opportunities to create value for all our stakeholders." Manifold added "Looking ahead to the remainder of 2022, we expect to deliver full-year EBITDA of approximately US$5.5bn."

Bangladesh: Crown Cement has estimated the total cost of cement capacity currently unused in Bangladesh at US$1.46bn. The figure is even higher when maintenance costs are included, according to Crown Cement's chief advisor Masud Khan. Over the past 15 years, national cement capacity has nearly quadrupled to 83.3Mt/yr from 22.4Mt/yr, while demand has merely doubled to 46.7Mt/yr from 22.8Mt/yr. Khan estimated the cost per 1Mt/yr of new Bangladeshi cement capacity over the period at US$40m.

Khan said that producers continue to anticipate an acceleration in local cement consumption growth in the medium-term future. Reflecting on the situation up to the end of 2022, he said "They thought if they were not prepared for the growing demand, they would lose their market share. That was why they continued expansion, bearing the burden of excess capacity." Khan forecast a further decline in the industry's capacity utilisation if gross domestic product undergoes a forecast drop during the 2023 financial year, impacting on producers' results for the year.

India: Dalmia Bharat sold 12Mt of cement during the first half of its 2023 financial year, up by 20% year-on-year from 10Mt in the first half of the 2022 financial year. Its income was US$757m, up by 21% year-on-year from US$624m. Meanwhile, the company's earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 28% to US$116m from US$161m. The company noted the growth effects of 'fuel price corrections' during the second quarter of 2022, which it expects to increase its profitability during the second half of year.

Managing director and CEO Punit Dalmia said “We are pleased with the performance of the first half of this year despite the intense inflationary environment, and are confident that we will be among the best in the industry, leaving the bad times behind. While the geopolitical turmoil continues, we are confident in the resilience of the Indian economy, which is further cementing its position at the centre of global growth and consumption.” Dalmia continued “In view of the government's continued momentum in the infrastructure sector, driven by the revitalisation of the housing sector, we expect the demand for cement to grow rapidly. Looking ahead, we will remain focused on our capacity expansion progress.”

Dalmia Bharat's 14 integrated cement and grinding plants span 10 Indian states and have a capacity of 37Mt/yr, India's fourth largest.

US: Martin Marietta Materials recorded revenues of US$4.68bn throughout the first nine months of 2022, up by 20% year-on-year from US$3.92bn. Cement sales contributed US$455m, 9.7% of total revenues, up by 27% from US$358m. Cost of revenues rose by 4% for the group, to US$3.62bn from US$2.92bn. Nonetheless, Martin Marietta Materials successfully recorded nine-month net earnings growth of 25% year-on-year, to US$638m from US$546m.

Chair and CEO Ward Nye said that double-digit price growth drove the company's record profitability. He said "Importantly, we expect a return to expanding margins in the fourth quarter of 2022, as the compounding effect of multiple pricing actions throughout the year offsets continued inflationary pressure and a slowdown in single-family residential construction. Martin Marietta's strategic coast-to-coast footprint is well positioned for long-term growth, driven by favourable population migration trends, housing shortages in our markets and a long-term federal highway bill complemented by healthy Department of Transportation budgets in the company's key states. Near-term, we expect affordability-driven headwinds in the single-family residential end market will be offset by a significant acceleration in public infrastructure investment and continued strength in large-scale energy, domestic manufacturing and multi-family residential projects."