Displaying items by tag: Results
Sanghi increases net profit by a third
10 August 2017India: Sanghi Industries has reported a rise of 33% in net profit for the first quarter of the 2018 financial year, the period from 1 April 2017 to 30 June 2017. The company’s net profit stood at US$4.9m, a 32% rise compared to the US$3.7m it made in the first quarter of the prior fiscal year. Its total income rose by 4% to US$49.2m, compared to US$47.2m a year earlier.
Alok Sanghi, Director, Sanghi Industries said, “There has been improvement in price realisation in the first quarter of the 2018 fiscal year, which has improved our margins. However, we were impacted due to higher fuel and diesel costs, which in turn affected our logistics costs. Moving further, we expect very good cement demand in the 2018 fiscal year due to infrastructure projects announced by the government.”
Japan: Taiheiyo Cement has announced its summary financial results for the first quarter of its 2017-2018 fiscal year, which ended on 30 June 2017. During the quarter the group took US$1.82bn in revenue, leading to an operating profit of US$80.5m and a net profit of US$42.1m.
The group forecast that it would see revenues of US$7.76bn for the fiscal year ending 31 March 2018, with a net profit of US$318.5m.
James Hardie presents results for second quarter of 2017
08 August 2017Australia: James Hardie has announced its financial results for the quarter ended 30 June 2017. The group’s adjusted net operating profit was US$61.7m, a decrease of 7% compared to the same period of 2016. Group adjusted earnings before interest and tax (EBIT) came to US$88.3m, a fall of 10% year-on-year, although net sales rose by 6% year-on-year to US$507.7m. James Hardie’s North American fibre cement segment saw its sales volume increase by 2% year-on-year, with nets sales up by 6% to US393.1m.
Group CEO Louis Gries said, "Our North America fibre cement segment results reflect top line growth of 6%, including volume growth below our market index. Additionally, manufacturing inefficiencies and production costs led to a decrease in EBIT margin of 5.2 percentage points compared to the prior corresponding period. Within our international fibre cement business, net sales increased 8% due to volume increases in our Asia Pacific market, and EBIT increased by 10%, driven by the strong performance of our Australian and New Zealand businesses."
France: Vicat’s earnings have been negatively affected by the devaluation of the Egyptian Pound and performance issues in Turkey. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 8.7% year-on-year to Euro188m in the first half to 2017 from Euro206m in the same period in 2016. Its sales fell by 0.8% to Euro1.25bn from Euro1.24bn. By business line its cement sales fell by 4.2% to Euro612m and its cement sales volumes declined by 2.6% to 10.8Mt.
“The Vicat Group’s first-half performance was affected by very unfavourable weather conditions in Europe, the US and Turkey, especially at the beginning of the year, and by a difficult macro-economic and industrial environment in Egypt. Other key regions such as India, the US and France recorded improvements. In a year that should be characterised by a very strong seasonality effect, Vicat now expects to benefit from a marked progression in its activities in the second semester,” said the group’s chairman and chief executive officer (CEO) Guy Sidos.
Buzzi Unicem sees recovery in Europe in first half of 2017
04 August 2017Italy: Buzzi Unicem has reported a recovery in Central Europe, a positive change in Eastern Europe and an improvement in Italy thanks to increased exports. It also noted muted demand in the US, particularly during the first quarter. Its net sales rose by 7.3% year-on-year to Euro1.35bn in the first half of 2017 from Euro1.26bn in the same period in 2016. Its cement sales volumes increased by 2.3% to 12.5Mt from 12.2Mt. Earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 8.4% to Euro241m from Euro223m.
Tunisia: Carthage Cement’s cement sales have fallen due to a ban on sales to Algeria. Its clinker production volumes fell by 27% year-on-year to 0.57Mt in the first half of 2017 from 0.78Mt in the same period in 2016 and its cement production fell by 13% to 0.72Mt from 0.83Mt. Cement export sales fell by 79% and overall its sales fell by 18% to Euro31.6m from Euro38.7m. However, the cement producer said it increased its market share in the period.
Half year multinational cement producer roundup
02 August 2017Cement sales volumes are down at the larger multinational cement producers so far in 2017. As the first half-year results emerge, a picture seems to be appearing of sluggish growth at best for the major internationals. Reduced working days and poor weather have been blamed for the underwhelming performance.
Graph 1: Cement sales volumes for selected multinational cement producers during the first half of 2017. Source: Company financial reports.
True, LafargeHolcim’s sales rose by 0.4% year-on-year on a like-for-like basis, probably due to the assets the group has been sloughing off since the merger, but this is hardly the dynamic growth shareholders may have hoped for. Meanwhile, HeidelbergCement, following its acquisition of Italcementi in late 2016, has only been able to increase its cement and clinker sales by 1% for the first half of 2017 once consolidation effects were excluded. Here the problem appears to be reduced sales in both the US and Indonesia at the same time. This then leaves Cemex with a 2% drop in sales volumes to 33.9Mt with a big drop in the US despite a promising construction market otherwise. It blamed the decline on a high comparison base in 2016 and the weather.
The larger regional players examined here appear to have fared better. Both UltraTech Cement in India and Dangote in sub-Saharan Africa reported flat or falling sales volumes. However, delve a little deeper and there’s more going on. UltraTech didn’t offer any reason for the decline although it was likely focused on its acquisition of assets from Jaiprakash Associates and the knock-on from the demonetisation process last year. That purchase increased its cement production capacity by nearly 40% to 91.4Mt/yr from 66.3Mt/yr and it seems keen, to investors at least, that it will be able to rocket up the capacity utilisation rate at the new plants.
Dangote meanwhile has taken a blow from the poor economic situation in Nigeria, where it still produces most of its cement. Here, sales fell by 21.8% to 6.86Mt from 8.77Mt, causing its overall sales to fall by 11.3% to 11.5Mt. Almost incredibly though, as Graph 2 shows, Dangote upped its sales revenue by a whopping 41.2% to US$1.13bn off the back of improved efficiencies and a much better fuel mix in Nigeria. The turnaround is impressive considering the pressure the company faced in 2016. Today’s news that the firm has sold a 2.3% stake to foreign investors adds to the impression of a company on the move.
Graph 2: Sales revenue for selected multinational cement producers during the first half of 2017. Source: Company financial reports.
Looking at overall sales revenue shows a happier picture for most of the producers detailed here, with the exception of HeidelbergCement. Although Graph 2 shows declines for LafargeHolcim and Cemex on a like-for-like basis, at least growth is occurring. HeidelbergCement though has reported static revenue on an adjusted basis for the period. This suggests that the producer has hit problems just as it is starting to integrate the Italcementi assets into its portfolio. In theory the geographic spread of its new production units should shield it from lowered growth elsewhere but if this doesn’t happen it may be in for a rougher ride than LafargeHolcim following its merger.
In summary, being a large-scale multinational cement producer doesn’t quite seem to be offering the balanced growth one might expect so far in 2017. Cement sales volumes are slipping and revenue is also down on a direct comparison basis. It’s barely a case for comparison but smaller regionally based producers like UltraTech Cement and Dangote, in the right locations, seem to be capitalising on their positions. We’ll see how the big Brazilian producers Votorantim and InterCement, Buzzi Unicem and CRH fit this trend when they release their financial results over the next few weeks.
Pakistan: Lucky Cement’s net sales rose by 5.7% to US$434m for the financial year that ended on 30 June 2017 from US$428m in the same period in 2016. Its cement sales volumes rose by 3.1% to 7.15Mt from 6.93Mt and its profit after tax rose by 5.8% to US$130m from US$123m. No reason for the good performance was presented in its financial results statement but that it said it was confident in the domestic market due to both resident and public sector construction markets and large scale infrastructure projects driven by the China-Pakistan Ecumenic Corridor initiative.
The cement producer also provided an update on new and on-going expansion projects. Its expansion plans at the Karachi Plant to add a 1.25Mt/yr production line are expected to reach commercial operations in December 2017. It is also in the process of obtaining approvals and authorisations from the state government of Punjab to build a new 2.3Mt/yr plant.
Germany: HeidelbergCement’s cement sales volumes have struggled to grow in the first half of 2017 following its acquisition of Italcementi. Its sales volumes rose to 60.7Mt year-on-year in the first half of 2017 from 39.9Mt in the same period in 2016. However, on a pro forma basis its sales fell by 1% with falling sales noted in its Asia-Pacific region. The group blamed its poor performance in the second quarter of 2017 on reduced working days, bad weather in the US and a late Ramadan period that reduced selling days in Indonesia.
“In the light of the difficult general conditions, we achieved a good result in the second quarter,” said Bernd Scheifele, chairman of the managing board. “We were able to almost offset the effect of higher energy costs, bad weather conditions, fewer working days, and increased competition in some emerging countries. The synergies from the Italcementi acquisition are clearly visible in the results.”
The group’s sales revenue rose by 31% to Euro8.39bn from Euro6.41bn although it only rose by 1% on a pro forma basis. Its earnings before interest and tax rose by 6% to Euro776m from Euro728m.
By region cement sales rose in all regions on both a consolidated and pro forma basis except for Asia-Pacific. Here, cement and clinker sales fell by 3.1% once the newly acquired Italcemeni assets in India and Thailand had been excluded. A particular decline was recorded in Indonesia due to the timing of Ramadan in June 2017 and reduced demand for residential housing. Elsewhere, the US market was hit by poor weather, although the housing market remained promising. In the group’s Africa-Eastern Mediterranean, the group reported issues in Egypt but strong increases in cement sales were reported as new production capacity started in Togo, Tanzania and Burkina Faso.
Nigeria: Dangote Cement’s sales revenue and operating profit have risen in the first half of 2017 despite a significant drop in sales volumes in Nigeria due to the poor state of the economy. Its sales revenue rose by 41.2% year-on-year to US$1.31bn in the first half of 2017 from US$928m in the same period in 2016 with increased revenue in both Nigeria and the rest of Africa. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 53.7% to US$647m from US$421m. It attributed the rising revenue to improved margins from better efficiencies and a better fuel mix in Nigeria.
“Our revenues have continued to grow despite the lower volumes seen in Nigeria, especially because of the recent heavy rains. Our margins have improved significantly, helped by improved efficiencies and a much better fuel mix in Nigeria. We are using much more gas and increasing our use of coal mined in Nigeria, thus reducing our need for foreign currency and supporting Nigerian jobs,” said chief executive officer (CEO) Onne van der Weijde. He added that the group had seen its first sales from Sierra Leone in the first quarter and that its new plant in the Republic of Congo will be in production at the end of July 2017.