Displaying items by tag: Results

Zimbabwe: LafargeHolcim subsidiary Lafarge Cement Zimbabwe has said that cement demand has increased by 34% quarter-on-quarter in the third quarter of 2020 following the end of the national coronavirus lockdown. Business Weekly News has reported that the company said that cement demand in July 2020 was the highest in that month since July 2003 due to a 7% year-on-year sales rise.

Company chair Kumbirai Katsande said, “As business activity progressively continued to gain momentum into the third quarter of 2020, the demand for cement consequently outstripped supply, causing considerable supply backlog.” Katsande said that the shortage will ease as demand decreases “associated with rainfall” in the fourth quarter of 2020.

Ireland: CRH recorded earnings before interest, taxation, depreciation and amortisation (EBITDA) of US$3.40bn in the first nine months of 2020, up by 2% year-on-year on a like-for-like basis from the corresponding period of 2019. The company said that it now expects full-year EBITDA in 2020 to exceed 2019 levels on a like-for-like basis at over US$4.40bn. Sales fell by 3% to US$20.6b but group added that it had “continued strong cash generation.”

Chief executive officer (CEO) Albert Manifold said, “Markets continue to be impacted by the global pandemic and, while we have seen some lower activity levels, I am pleased to report further improvement in trading performance, with an advance in both profitability and margins. The outlook for the coming months remains uncertain and visibility is limited, however I am confident that we are well positioned for the challenges and opportunities that lie ahead.”

Taiwan: Taiwan Cement’s revenue came to US$2.88bn in the first nine months of 2020, a year-on-year decrease of 6%. However, its operating income was US$800m, a 9% year-on-year increase compared to the first nine months of 2019. Its net income was US$640m, 4% higher than a year earlier.

“The fourth quarter is the traditional peak season for the cement market and we remain optimistic about our performance,” said Edward Huang, Senior Vice President and Spokesperson of Taiwan Cement.

Brazil: Votorantim Cimentos’ consolidated net sales in the first nine months of 2020 were US$2.17bn, up by 23% year-on-year from US$1.76bn in the corresponding period of 2019. However, its profit fell by 61% to US$28.7m from US$73.9m

Cement sales in the third quarter of 2020 rose by 15% year-on-year to 9.7Mt from 8.4Mt in the third quarter of 2019. The company reported increased sales volumes in Uruguay, the US and Canada, and an 18% increase in Brazil, “maintaining the strong pace” recorded at the end of the first half of 2020. The company said, “The significant emergency aid from government during this period and its use in the direct purchase of construction inputs, including cement, has supported civil construction alongside the currently historically low interest rate. In addition, people continue to invest in improving their homes, with retail sales of building materials increasing nationally.”

The company’s third quarter adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 94% to US$281m in 2020 from US$145m in 2019. It said, “The economic opening after the initial restrictions of the Covid-19 pandemic is turning out more positively than anticipated on the third quarter of 2020, while the on-going recovery is projected to be gradual, considering the uncertain scenario. Currently, global gross domestic product (GDP) is projected to decrease 4% in 2020 - less severely than the previously published data, although uncertainty around the recovery path for upcoming years due to second wave of Covid-19 remains considerable in some countries, alongside viability of additional fiscal and monetary stimulus.”

Italy: Caltagirone Group company Cementir Holding sold 7.7Mt of grey cement, white cement and clinker in the first nine months of 2020, up by 11% year-on-year from 6.9Mt in the first nine months of 2019. Earnings before interest, taxation, depreciation and amortisation (EBITDA) declined by 2% over the period, to Euro178m from Euro182m, while sales also declined, by 1% to Euro897m from Euro906m.

One notable region where the trend was reversed was Egypt, where, in spite of a 2.5% fall in cement and clinker volumes, EBITDA rose by 40% to Euro6.81m from Euro4.86m and sales rose by 16% to Euro31.3m from Euro27.1m. EBITDA also rose in the Nordic and Baltic, Turkey, China and Asia-Pacific regions.

Chief executive officer (CEO) and chair Francesco Caltagirone said, “Results significantly improved in the third quarter, with cement up by 19% and EBITDA up by 12% compared to the third quarter of 2019.”

Greece: Titan Cement recorded earnings before interest, taxation, depreciation and amortisation (EBITDA) of Euro229m in the first nine months of 2020, up by 10% year-on-year from Euro208m in the first nine months of 2019. Its sales fell slightly to Euro1.20bn from Euro1.21bn. The group noted “resilient sales volumes across most of our markets, ” including “strong domestic and export growth in Turkey and improving demand in Brazil.”

Dimitri Papalexopoulos, chair of the group executive committee said, “We are successfully addressing several challenges at the same time: taking care of our people and those around us, delivering improved operating results and accelerating progress against our sustainability ambitions. Despite the uncertain context, we remain confident in the solidity of our business model, based on the nature of construction activity, our track record in facing the pandemic and the resilience and dedication of our people.’’

Colombia: 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.”

Argentina: InterCement subsidiary Loma Negra’s nine-month net sales for the period ending 30 September 2020 were US$321m, down by 23% year-on-year from US$416m. Its net profit doubled to US$95.3m from US$44.9m.

Chief executive officer (CEO) Sergio Faifman said, “We feel very satisfied with the robust position with which we concluded the third quarter of 2020. We have improved our operational results with margins expansion on the back of a continuing sales volume improvement coupled with effective cost and price management.

Faifman continued, “additionally, we seamlessly executed the sale of our Paraguayan operation, an excellent deal in terms of value generation and timing. We optimised the proceeds from the transaction, creating value for our shareholders and, at the time, strengthening our already robust financial situation.” He added, “In the quarter, cement demand in Argentina continues to operate at two speeds. On one side, our bagged cement segment has taken a strong recovery path of 18% year-on-year business growth, mostly due to household and retail demand. By contrast, the bulk cement segment, as well as concrete and aggregates, are still affected by the very low levels of larger private and public works, the execution of which is still hampered by the coronavirus lockdown and its effects.”

The company said that its L’Amali cement plant upgrade – a “key element of our long-term strategy” – is on track, but that uncertainties around the impacts of the coronavirus outbreak meant that the new line would not necessarily be commissioned when scheduled in early 2021.

2020 has been a year like no other and this clearly shows in the financial results of the major cement producers so far.

The first jolt is that several major Chinese cement producers have seen their sales fall. Following a tough first quarter due to coronavirus, the Chinese industry then overcame floods in the summer, to eventually report a decrease in cement output of 1.1% year-on-year to 1.68Bnt in the first nine months of 2020. The world’s largest cement producer, CNBM, reported a slightly smaller drop in sales year-on-year in the first nine months of 2020. This relatively small fall, just below 1%, may be due to CNBM’s size and diversity of business interests. Other large Chinese producers have noted bigger losses, such as Huaxin Cement’s 9% sales decline to US$3.04bn and Jidong Cement’s 5% sales fall to US$3.8bn. However, Anhui Conch actually saw a 12% rise in sales to US$18.7bn.

Graph 1: Sales revenue from selected cement producers, Q1 - 3 2020. Source: Company reports.

Graph 2: Cement sales volumes from selected cement producers, Q1 - 3 2020. Source: Company reports.

LafargeHolcim’s sales look worse in Graph 1 than they really are because the group was busy divesting assets in 2019. Its net sales fell by 7.9% on a like-for-like basis to US$18.7bn in the first nine months of 2020, a rate of change similar to HeidelbergCement’s. Being a properly multinational building materials producer brings mixed benefits given that these companies have suffered from coronavirus-related lockdowns in different times in different places but they have also been able to hedge themselves from this effect through their many locations. In the third quarter of 2020, for example, LafargeHolcim was reporting recovering cement sales in its Asia-Pacific, Latin America and western/central parts of its Europe regions but problems in North America. Again, HeidelbergCement noted a similar picture with cement deliveries up in its Africa-Eastern Mediterranean Basin Group area, stable in Northern and Eastern Europe-Central Asia and down elsewhere. How the latest round of public health-related lockdowns in Europe round off a bad year remains to be seen.

The other more regional producers are noteworthy particularly due to their different geographical distribution. Cemex has seen a lower fall in sales revenue and cement sales volumes so far in 2020, possibly due to its greater presence in North America. What happens in the fourth quarter is uncertain at best, with US coronavirus cases rising and the Portland Cement Association (PCA) expecting a small decline in cement consumption overall in 2020. Along similar lines, Buzzi Unicem appears to have benefitted from its strong presence in Germany and the US, leading it to report a below 1% drop in sales revenue so far in 2020, the lowest of the decreases reported here for the western multinational cement companies.

Looking more widely, UltraTech Cement, India’s largest producer, had to contend with a near complete government-mandated plant shutdown in late March 2021. The figures presented here are calculated for comparison with other companies around the world due to the difference between the standard calendar financial year (January to December) and the Indian financial year (April to March). However, they suggest that Ultratech Cement suffered a 14% fall in sales to US$3.9bn and an 8% decline in sales volumes to 56Mt, among the worst decline of all the companies featured here. This is unsurprising given that UltraTech mostly operates in one country. Sure enough it bounced back in its second quarter (June – September 2020) with jumps in revenue, earnings and volumes.

Finally, for a view of a region that hasn’t had to face coronavirus-related economic disruption of anything like the same scale, Dangote Cement has reported solid growth so far in 2020, with rises in sales and volumes both above 5%. Economic problems at home in Nigeria have seen relatively higher growth elsewhere in Africa in recent years but now the pendulum has swung back home again. The big news has been that the company has pushed ahead with plans to turn Nigeria into a cement export hub, with a maiden shipment of clinker from Nigeria to Senegal in June 2020. The vision behind this has expanded from making Nigeria self-sufficient in cement from a few years ago into making the entirety of West and Central Africa cement and clinker ‘independent.’

The big news internationally this week was of the reported effectiveness of a Covid-19 vaccine in early trials by Pfizer and BioNTech. It might not yet make it into people’s arms at scale but it shows that the vaccine appears to work and that others in development and testing may do too. Building material manufacturer share prices didn’t rally as much as airlines or cinema chains on the news, construction has carried on after all, but this is a positive sign that normality for both health and wealth is on the way back at some point in 2021. One point to consider, given the wide regional variation with the economic effects of coronavirus, is what effect a disjointed global rollout of a vaccine or vaccines might have. A building material manufacturer dependent on a region that stamps out the virus later than other places might face an economic penalty. Recovery seems likely in 2021 but it isn’t guaranteed and the implications of the coronavirus crisis seem set to persist for a while yet. Here’s hoping for a different outlook at this point in 2021.

Italy: Buzzi Unicem’s net sales fell slightly to Euro2.41bn in the first nine months of 2020 from Euro2.42bn in the same period in 2019. Its cement sales volumes declined by 1.8% to 21.7Mt from 22.1Mt. The group said that sales volumes recovered during the third quarter of 2020 due to a rebound of demand in Italy, stability in Germany and a ‘trend reversal’ in Russia. Net sales also increased in the US during the third quarter.