Displaying items by tag: Results

Germany: HeidelbergCement’s sales in the first nine months of 2019 were Euro14.3bn, up by 7.0% from Euro13.4bn in the corresponding period of 2018. It reached its savings target for sales and general administration costs of Euro100m 15 months ahead of schedule and cut net debt by Euro1.1bn. Bernd Scheifele, chairman of the managing board of HeidelbergCement, said “Price increases and strict cost discipline more than compensated for slightly weaker demand in the third quarter.”

Greece: Titan Cement has increased its nine-month turnover by 9.7% year-on-year to US$1.21bn to 30 September 2019 from US$1.10m in the corresponding period of 2018. Net profit after tax fell by 9.9% year-on-year to US$45.3m from US$50.2m. The company noted progressive sales momentum growth throughout the period, with profitability in all regions except the Eastern Mediterranean, and projected further growth with the continued recovery of markets in Southeastern Europe.

Japan: Sumitomo Osaka Cement has recorded sales of US$1.10bn in the six months to 30 September 2019, down by 0.9% from US$1.11bn in the corresponding period of 2018. In spite of this, as well as high fuel costs and an upgrade to its Shimizu cement terminal during the period, it increased its six-month profit by 7.5% to US$57.8m in the six months to 30 September 2019 from US$53.8m in the corresponding period of 2018.

France: Vicat has sold Euro2.06bn-worth of cement in the nine months to 30 September 2019, up by 5.7% year-on-year from Euro1.95bn in the corresponding period of 2018. Its cement section’s sales lagged behind concrete and aggregates, with a rise of 4.5% to Euro991m from Euro948m in the nine months to 30 September 2018. “The Group’s strategy of raising prices is paying off in almost all operating regions, while energy costs fell,” said Vicat Group Chairman and CEO Guy Sidos. He expects exchange rate gains to pay dividends in the final quarter, notably in Turkey.

Jordan: 21.8% state-owned Jordan Cement, 50.3% subsidiary of LafargeHolcim, has laid off 200 of its 550 employees after incurring losses of US$87m in the nine months to 30 September 2019. Reuters has reported that the company, whose 2018 losses were US$48.9m, up by 4.0% year-on-year from US$47.0m in 2017, made the sackings ‘to ensure its continuity,’ according to Jordan Cement CEO Samaan Samaan. The company has operated a single line at its 2.0Mt/yr integrated Rashadiyah cement plant since the closure of its 2.0Mt/yr Fuhais plant in 2013. The country’s 9Mt/yr-capacity cement sector serves a domestic demand of 4Mt/yr.

Indonesia: Semen Indonesia has reported revenues of US$2.00bn in the nine months to 30 September 2019, up by 31% from US$1.53bn in the corresponding period of 2018. The Group’s acquisition of Holcim Indonesia in February 2019 expanded its domestic cement production capacity to 39.4Mt/yr, which it says has bolstered its competetiveness against importers in a crowded domestic market.

The company recorded US$91.7m in profit over the period, down by 38% year-on-year from US$148m as its foreign sections failed to grow.

Nigeria: Over a nine-month period to 30 September 2019 in which Dangote Cement increased its volumes by 1.1% to 18.0Mt from 17.8Mt in the corresponding period of 2018, earnings before interest, taxes, depreciation and amortisation (EBITDA) for Africa’s largest cement producer fell by 1.6% year-on-year to US$0.84bn from US$0.85bn. Group CEO Joe Makoju noted a year-on-year 0.6% increase in Nigerian volumes to 10.8Mt from 1.07Mt, as well growth in Tanzania and good sales in Senegal, as helping to offset ‘economic and operating challenges in key territories such as Ethiopia and South Africa.’

Dangote identified its Seven Sustainability Pillars for management as enabling it to realise its commitment to increasing value for all stakeholders. This may have contributed to its ranking second in Sub-Saharan Africa in Forbes’ Global 2000 World’s Best Employers.

Spain: Cementos Molins’ nine-month income rose by 8.0% year-on-year to Euro594m from Euro550m in the corresponding period of 2018. Its earnings before interest, taxes, depreciation and amortisation (EBITDA) rose by 6.3%. Its South American subsidiaries’ sales and EBITDA outstripped those in other regions. The company’s consolidated net profit for the period rose by 9.7% to Euro70.2m from Euro64.0m in 2018.

The Australian cement supply spat calmed down a little this week with the announcement that Wagners Holdings has agreed to resume the supply of cement products from its Pinkenba grinding plant in Brisbane to Boral. Legal proceedings are still on-going with a trial date set at the Supreme Court of Queensland in late November 2019.

The argument blew up publicly in March 2019, when Wagners said it had suspended its cement supply to Boral for six months. Wagners has a cement supply agreement with Boral whereby it supplies cement on an annual basis for a fixed price. However, Boral informed Wagners that it had found cheaper cement from a ‘long established’ supplier in South East Queensland. Local press speculated that this ‘long established’ supplier was Cement Australia, the joint venture between LafargeHolcim and HeidelbergCement. Wagners then had the choice to either match the lower price or suspend its supply. The disagreement took the legal route as the parties failed to reach an agreement. Wagner says that its cement supply agreement with Boral ‘remains binding on both parties’ until 2031.

Wagners later reported that it expected the suspension to cost it around US$7m in 2019. The deal with Boral constituted about 40% of its cement sales volumes. Its overall revenue grew year-on-year in its 2019 business year to the end of June 2019 but its cement sales volumes fell. Its earnings also fell. This was blamed on higher activity in lower margin areas such as contract haulage and fixed plant concrete, and delays in major infrastructure project work in South-East Queensland.

Boral, meanwhile, suffered from falling revenue and earnings from its Boral Australia subsidiary in its financial year to June 2019 due to a slowing construction market. Notably, its cement sales revenue rose by 7% due to ‘favourable’ pricing, higher volumes and cost-saving programs. It didn’t say whether the cost cutting included sourcing cement from a different supplier! All of this though was counteracted by lower contributions from its Sunstate joint venture (JV) with Adelaide Brighton and higher fuel and clinker costs.

All of this is fascinating because these kinds of disputes usually remain out of the public eye. The large size of Wagners’ cement supply deal with Boral meant that when it was threatened it likely had to tell its shareholders due to the potential financial impact. Whether Boral can wriggle out of the contract is now a matter for the courts.

The broader picture is that even though Boral Australia’s cement division seemed to be growing in its 2019 financial year it was still trying to reduce its costs in the face of a decelerating construction market. Added to this, the companies hold both a supplier and a competitor relationship. On the production side Boral operates an integrated plant at Berrima in New South Wales (NSW), a grinding plant at Maldon, NSW and another grinding plant in its Sunstate JV at Brisbane, Queensland. Wagners runs its own grinding plant at Pinkenba, Queensland. Both companies operate concrete plants. This is not unusual for a concentrated industrial sector like cement but it creates problems for the regulators. Note that, also this week, the Australian Competition and Consumer Commission was reportedly paying attention to the links between Barro Group and Adelaide Brighton. Barro owns a 43% stake in Adelaide Brighton but the authorities are concerned about a possible overlap in the two companies’ roles as suppliers of cement, concrete and aggregates. Any slowdown in construction in Australia seems likely to heighten these kinds of issues.

Switzerland: LafargeHolcim has recorded a fall in third-quarter net sales of 3.0% year-on-year to Euro6.46bn from Euro6.68bn in 2018 and a fall of 2.1% year-on-year in 2019 to Euro18.3bn in nine-month net sales to 30 September 2019 from Euro18.7bn in the corresponding period of a 2018. Earnings before interest, taxes, depreciation and amortisation (EBITDA) grew by 0.8% year-on-year to Euro1.71bn in the third quarter of 2019 from Euro1.69bn. EBITDA in the nine months to 30 September 2019 grew by 4.4% to Euro4.12bn from Euro3.95bn. The company said that it improved its margin in the Europe, North America and Asia Pacific regions, with localised profit growth in the Middle East Africa region in South Africa, Jordan and Iraq. Profitability in Latin America stabilised, with price management partially mitigating the challenges of several markets and a good performance in Colombia.

Based on the results, LafarageHolcim has reaffirmed its commitment to increase net sales by 3-5% year-on-year to between Euro25.6bn and Euro26.2bn in 2019 from Euro24.9bn in 2018, and to reduce the ratio of its net debt to recurring EBITDA to ‘well below’ two to one.