Displaying items by tag: Results

Brazil: Votorantim’s sales from its cement business have grown due to increased sales volumes in Brail, Turkey, India and Latin America. Higher prices in North America and Europe, Asia and Africa also contributed to the result. Votorantim Cimentos’ sales revenue grew by 11% year-on-year to US$682m in the first half of 2018 from US$613m in the same period in 2017. Local sales in Brazil grew by 13% to US$417m due to concrete and mortar sales. Its adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 28% to US$65.3m from US$50.8m.

Colombia: Cementos Argos’ sales have fallen due to decreased cement sales volumes in Colombia and the US. It blamed poor weather in the US and a large number of holidays in Colombia for the situation. Its sales revenue dropped by 8.2% year-on-year to US$677m from US$737m. However, its adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 2% to US$107m from US$104m.

“The growth of EBITDA throughout all our regions is proof that the strategy we established is beginning to reap the benefits of the best efficiency programme and to focus our initiatives in continuing to provide the best experiences to our clients,” said Juan Esteban Calle, president of Cementos Argos.

Cement sales volumes fell by 4.1% overall to 3.69Mt. Volume drops were noted in Colombia and the US but in the rest of the world they rose by 11%.

Japan: Sumitomo Osaka Cement’s net sales rose by 4.6% year-on-year to US$2.24bn in the financial year that ended on 31 March 2018 from US$2.14bn in the same period of the previous year. It attributed the increase to higher sales volumes of cement. However, its operating income fell by 15.6% to US$92m from US$113 due to higher coal prices. The company said that overall local demand in the country rose by 0.2% to 42Mt during the reporting period. Exports rose by 2.4% to 11.8Mt.

Japan: Taiheiyo Cement’s sales rose by to 9.1% year-on-year to US$7.98bn in the financial year that ended on 31 March 2018 from US$7.30bn in the same period of the previous year. Its domestic sales volumes increased by 2.4% to 14.7Mt and its export sales fell by 2.7% to 2.3Mt.

Italy: Buzzi Unicem’s sales fell by 8.4% year-on-year to Euro539m in the first quarter of 2018 from Euro589m in the same period in 2017. Its cement sales fell by 1.6% to 5.1Mt from 5.2Mt. It blamed poor weather and reduced working days in the reporting period. Sales volumes in Eastern Europe performed well due to favourable trends in the Czech Republic and Russia. Sales in Italy improved due to the consolidation of Cementizillo into the group.

Italy: Cementir’s sales and earnings have fallen following the divestment of its local business. Its sales dropped by 1.6% year-on-year to Euro242m in the first quarter of 2018 from Euro246 in the same period of 2017 when adjusted for the divestment. Earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 12.4% to Euro241m from Euro27.5m. Cement sales volumes increased by 4.1% to 2.08Mt from 2Mt.

“The exit of Cementir Italia group from the perimeter of consolidation and the improvement in Turkey and China offset the deterioration of results in Egypt caused by the curfew introduced in February 2018, the effects of harsh weather conditions in Scandinavian countries, and the fewer number of working days due to the early Easter holidays, which resulted in lower earnings in Norway and, to a lesser extent, in Belgium, Denmark, Sweden and Malaysia,” said the company in a results statement.

The group’s board of directors has also approved a business plan for 2018 to 2020 to recognise changes in its portfolio. In 2020 the group forecasts that the Nordic and Baltic countries and the US will generate about 72% of the group's revenue, while the Eastern Mediterranean area, including Turkey and Egypt, will generate 20% and the Asia Pacific area, including China and Malaysia, will account for around 6%.

Along with most of the other multinational cement producers the weather and a shorter reporting period has given LafargeHolcim an easy target to blame its first quarter troubles on. Cement and overall sales both grew by over 3% year-on-year on a like-for-like basis but its earnings have fallen.

The problem appears to have arisen from falling earnings in Europe and its Middle East African regions. The decline in Europe was pinned on the weather, less working days and a disproportionate impact of maintenance shutdowns despite positive market trends in most countries. However, in Middle East Africa the finger was pointed squarely at ‘challenging’ conditions in key markets. If the trends from late 2017 continued then the hotspots causing LafargeHolcim trouble were likely to be Algeria, Egypt and Nigeria. That reliance on key markets is contrasted in Asia Pacific where markets in Indian and China have provided sufficient sales and profit growth to overcome problems in South East Asia. HeidelbergCement, its nearest multinational competitor with first quarter results out today, seemed to cope better with increased sales volumes of cement driven particularly by Indonesia and India.

Graphs 1: First quarter cement sales volumes and sales revenue for LafarageHolcim, 2015 – 2018. Source: Company reports. 

The graph above doesn’t seem to show the benefits the merger between Lafarge and Holcim promised back in 2015. Remember though that LafargeHolcim has been steadily reducing in size. Like-for-like sales generally show a much better situation.

In the latest results chief executive Jan Jenisch was keen to move on and focus on the group’s reorganisation plan, Strategy 2022. It has targeted net sales growth of 3 – 5% and recurring earnings before interest, taxation, depreciation and amortisation (EBITDA) of at least 5%. Both look achievable based on previous quarterly and annual reports although the switch to recurring EBITDA from operating EBITDA makes it harder compare the first quarter of 2018 with the one in 2017.

The other notable change in recent months has been the decision by Thomas Schmidheiny to leave the board of LafargeHolcim. He has been named as the group’s honorary chairman and he will remain as a major shareholder of the group. During the negotiations to merge Lafarge and Holcim in 2015, Schmidheiny held out to get a better deal leading to Lafarge’s Bruno Lafont losing out on the chief executive role. Instead, that position went to Lafarge’s Eric Olsen who was succeeded by Jenisch in October 2017. Lafont and Olsen have since been enveloped by the French legal investigation into Lafarge Syria’s conduct during the Syrian Civil War.

How much of a difference Schmidheiny’s departure from the board of LafargeHolcim will make remains to be seen. However, the sense that Jan Jenisch is making changes to the group is palpable with changes made to its corporate structure in December 2017 followed by the introduction of the wider Strategy 2022 initiative. With the bad weather hopefully ended for the year all eyes will be on the half-year results.

Germany: HeidelbergCement has increased its sales volumes of cement in the first quarter of 2018 despite facing poor weather and coping with reduced working days. Sales volumes of cement rose by 2% year-on-year to 28.2Mt from 27.5Mt in the same period in 2017. Falling sales volumes in Europe and North America were offset by growth in Asia-Pacific and Africa-Eastern Mediterranean Basin. In Asia, Indonesia and India contributed strongly to its growth, the cement producer said. In Africa, increases in sales volumes were recorded in Egypt, Ghana and Tanzania. Its sales revenue increased on a like-for-like basis by 2% to Euro3.78bn.

“HeidelbergCement generated a profit in the seasonally weak first quarter and despite difficult weather conditions,” said Bernd Scheifele, chairman of the managing board of HeidelbergCement. “Our successful management of the portfolio and financial result more than compensated for the weather-related decline in operating result.”

The group completed its acquisition of Cementir Italia in Italy and the Alex Fraser Group in Australia in the reporting period. It also finished the sale of the sand-lime brick operating line in Germany and its white cement business in the US.

Thailand: SCG’s cement business’ earnings have risen due to higher local prices and cost savings in the first quarter of 2018. Its earnings before interest, taxation, depreciation and amortisation (EBTIDA) rose by 7% year-on-year to US$201m in the first quarter of 2018 from US$195m in the same period in 2017. The company said that local demand for cement remained flat in the reporting period as increased demand from the government sector balanced out declines elsewhere. Local exports rose by 20% to 1.2Mt.

Switzerland: LafargeHolcim has blamed falling earnings in the first quarter of 2018 on poor weather in North America and Europe. Its recurring earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 7.7% on a like-for-like basis year-on-year to Euro587m from Euro678m in the same period in 2017. Its net sales rose by 3.1% to Euro4.89bn and its cement sales volumes rose by 3.2% to 47.7Mt on a like-for-like basis.

By region cement sales volumes fell on a like-for-like basis in Europe, Middle East Africa and North America. LafargeHolcim said that cement volumes were down slightly in its Middle East Africa region due to a mixed outlook in the region with ‘challenging’ conditions in key markets. In Asia Pacific it said that China and India drove its growth in sales and profits but that there was continued pressure in South East Asia.

“Though the quarter was affected by several headwinds, we expect the strength of our portfolio and the benefits of our new strategy to become increasingly visible over the full year. That makes us confident we will deliver on our 2018 targets,” said Jan Jenisch, Group Chief Executive Officer of LafargeHolcim. He added that the group was conducting its Strategy 2022 reorganisation plan.