Displaying items by tag: Results
Cemex: wrong place, wrong time?
10 February 2016Cemex trumpeted last week that it had returned to positive net income for the first time in six years in its fourth quarter results for 2015. In effect the multinational building materials company was saying it is putting its house in order following taking on too much debt in the late 2000s. Similar reassuring noises have repeatedly been made as it has cut its debts down since that time.
The figure Cemex was shouting about this time was its controlling interest net income or the net income attributable to the controlling shareholder. It has risen to a gain of US$75m after being negative, or in loss, since 2010. In that year the sting from the financial crash in 2008 caused havoc and net sales for the company hit a low of US$14bn, having been at over US$20bn in the boom times of 2007 and 2008.
Meanwhile, the company has been steadily whittling away at its total debt reducing it down to just US$15.3bn in 2015. This is a massive figure given that its total equity was US$9.5bn in 2015.
By comparison, Lafarge was reporting a net debt of Euro9.3bn in 2014 compared to a total equity of Euro17.3bn. Its debt-to-equity ratio was far smaller than Cemex’s despite being perceived as the weaker partner financially going into the merger with Holcim in 2015. Unsurprisingly, it was news in August 2015 when Cemex refinanced a bank loan agreement for a US$15bn debt that was previously renegotiated in 2009. Everyone is watching Cemex’s debts keenly.
Against this financial backdrop Cemex’s cement business has been steadily producing fairly static levels of cement since 2009. It 2015 it has reported that it produced 66Mt. However, net sales fell in 2015 by 8% year-on-year to US$14bn, a disappointing result following sales growth since 2012. Fernando A Gonzalez, Cemex’s Chief Executive Officer, blamed it on a ‘challenging’ macroeconomic environment.
Notably overall net sales have been down in Mexico, Northern Europe and Central and South America in 2015. Although Cemex hasn’t released cement sales volumes, volumes fell by 3% in Northern Europe, 2% in its Mediterranean region and 4% in Central and South America in 2015. Thankfully, growth continued to pick up the US, bolstered by housing and infrastructure spending. The Philippines has remained a powerhouse in cement consumption in Asia.
Reviewing Cemex’s expansion projects in 2015 suggest muted capital expenditure with a focus on upgrades and side projects rather than clinker production growth. Such announcements included projects in Nicaragua, the Dominican Republic, Colombia and Mexico. The exception was in the Philippines where a full-on US$300m project including a new 1.5Mt/yr plant was announced in May 2015. Given the surging cement volume sales in the country this is likely a safe investment.
As discussed previously in this column and elsewhere Cemex has suffered from high debts at exactly the time its major international rivals have started to merge. At the same time its Chinese rivals in terms of production capacity have undergone similar capacity consolidation as part of state mandated capacity reduction initiatives. This has left Cemex between the mega-cement producers like LafargeHoclim and HeidelbergCement and the up-and-comers such as Eurocement or Votorantim.
Now, its reliance on markets in the Americas it hitting a roadblock from reducing growth south of the US as global commodity prices tumble and economies suffer. It couldn’t have happened at a worse time for the company. Bar the odd bright spot such as the US and the Philippines it seems that all Cemex can do is wait it out.
Boral profit grows by 23% to US$97.2m for half year
10 February 2016Australia: Boral’s profit after tax has grown by 23% year-on-year to US$97.2m in the first half of its 2016 financial year. It reported a profit of US$80m for the same period in its 2015 period. It attributed the growth to a strong residential
market and growth in New South Wales (NSW) with cost cutting, price rises and slightly higher property earnings for its construction materials and cement business. Overall revenue fell by 4% year-on-year to US$1.6bn.
“The success of the first half is underpinned by a very strong residential construction market in NSW, a solid performance in South-East Queensland, further recovery in the US and a successful growth strategy in the gypsum business in Australia and Asia,” said Boral CEO and Managing Director Mike Kane
Boral’s cement business reported a 6% rise in external revenue to US$113m. Profitability was also aided by cost cutting inititaives including improved utilisation of assets and sourcing of raw materials and energy at lower cost.
Semapa cement sales grow by 11% to Euro477m in 2015
10 February 2016Portugal: Semapa has reported that its cement sales grew by 11% year-on-year to Euro477m in 2015 from Euro430m in 2014. It attributed the increase to growth in turnover of operations in Portugal, Lebanon and Angola and the integration of the Supremo Group on 1 July 2015.
Earnings before interest, taxation, depreciation and amortisation for its cement business grew by 14.7% year-on-year to Euro85.4m from Euro74.4m in 2014. However, its pre-tax profit fell to a loss of Euro18.3m from a gain of Euro9.7m a year earlier.
The Portuguese industrial conglomerate noted that cement sales in Portugal rose by 3.4% year-on-year in 2015, the highest increase since 2008. In Lebanon it reported a 8.6% year-on-year drop in cement consumption in 2015. In Tunisia it reported a drop in cement demand in the second half of the year. In Angola it reported that cement consumption fell by 11.7%. Despite these market conditions its turnover in Lebanon and Angola grew in 2015.
In Brazil Semapa acquired the remaining 50% of the Supremo Group in June 2015, taking control of its 2Mt/yr production capacity. However, Semapa reported SNIC data that the Brazilian cement market has dropped by 9.2% in 2015.
Looking ahead, Semapa forecasts that the cement market is expected to drop slightly in 2016 but with growth in Portugal.
Vicat like-for-like sales fall by 4.4% in 2015
05 February 2016France: The Vicat group has today reported that its sales, at constant scope and exchange rates, fell by 4.4% in 2015. Reported sales rose slightly, by 1.5% year-on-year to Euro2.46bn in 2015, compared to Euro2.43bn in 2014. Cement sales fell by 0.4% to Euro1.26bn from Euro1.26bn.
"The sales growth achieved by the Vicat group in 2015 again reflected a contrasting picture from one region to another. Business momentum in the United States and Asia helped to offset the impact of a more challenging macroeconomic and competitive environment in West Africa and the Middle East, as well as in Europe. Notably, the group's activity returned to growth in France in the fourth quarter, helped by a positive weather effect and a stabilising industry environment," said the Group's Chairman and CEO, Guy Sidos.
By region, Vicat noted falls in sales in its cement business in France and Europe.
This decline was blamed on a volume contraction and a slight decrease in average selling prices. Sales in the US grew by 23.6% on a like-for-like basis in 2015 due to high volumes, strong momentum in the south-eastern US and price increases. Sales in Asia grew by 3.1% on a like-for-like basis driven by increases in Turkey and India despite a decrease in Kazakhstan. Notably, Vicat reported that its sales rose in India, despite falling volumes due to price increases. Sales in Africa and the Middle East fell by 16.6% on a like-for-like basis, mainly due to a steep fall in business in Egypt.
Reported sales volumes in cement fell by 3.6% to 19.8Mt in 2015 compared to 20.5Mt in 2014.
Akmenes Cementas revenue drops by 6% to Euro55.4m in 2015
05 February 2016Lithuania: Akmenes Cementas has reported that its revenue fell by 6% year-on-year to Euro55.4m in 2015 from Euro59.2m in 2014. It sold nearly 1Mt of cement in 2015. Nearly half of its revenue came from exports markets in Poland, Scandinavia and Kaliningrad, according to local press.
Akmenes Cementas CEO, Arturas Zaremba, told Verslo Zinios that cement consumption in Lithuania fell by 5% in 2014 and by 7% in 2015. He blamed this on increased competition from cement producers in Belarus.
Cemex announces return to positive income in 2015
04 February 2016Mexico: Cemex has announced its results for the fourth quarter and full year 2015. On a like-for-like basis, for ongoing operations and adjusting for currency fluctuations, consolidated net sales increased by 2% during the fourth quarter of 2015 to US$3.4bn. They rose by 5% for the full year to US$14.1bn. Operating earnings before interest, tax, depreciation and amortisation (EBITDA) (also on a like-for-like basis) increased by 7% during the fourth quarter to US$663m and went up by 9% for the full year to US$2.6bn.
The increase in consolidated net sales, on a like-to-like basis, was due to higher prices of Cemex's products, in local currency terms, across most of its operations, as well as higher volumes in the US, the Mediterranean and Asia. On a like-for-like basis, operating earnings before other expenses, net, in the fourth quarter increased by 11% to US$410m and in the full year increased by 17% to US$1.7bn versus the same periods in 2014.
Fernando A Gonzalez, Cemex Chief Executive Officer, said, "Despite a challenging macroeconomic environment, which has affected many of our markets, our industry and Cemex in particular, we have been able to meet these challenges and deliver strong operating and financial results, on a like-to-like basis."
"Our full-year net income was positive for the first time in six years. In addition, our operating EBITDA increased by 9%, on a like-to-like basis, reflecting our cost-reduction program of US$150m as well as a positive operating leverage in several of our markets, which translated into a 1.1 percentage-point improvement in operating EBITDA margin. I am particularly pleased with the growth in our free cash flow after maintenance capex of more than US$480 million, which enabled us to reduce our debt by close to US$1bn during the year."
Sales in Cemex's Mexican operations decreased 19% in the fourth quarter of 2015 to US$672m, compared with US$827m in the fourth quarter of 2014. Operating EBITDA decreased by 10% to US$231m versus the same period of last year.
Cemex's operations in the United States reported net sales of US$967m in the fourth quarter of 2015, up by 5% from the same period in 2014. Operating EBITDA increased 26% to US$173m in the quarter, versus US$138m in the same quarter of 2014.
In Northern Europe, net sales for the fourth quarter of 2015 decreased 18% to US$738m, compared with US$901m in the fourth quarter of 2014. Operating EBITDA was US$71m for the quarter, 14% lower than the same period of 2014.
Fourth-quarter net sales in the Mediterranean region were US$370m, 4% higher compared with US$357m during the fourth quarter of 2014. Operating EBITDA decreased 5% to US$63m for the quarter versus the same period in 2014.
Cemex's operations in South, Central America and the Caribbean reported net sales of US$436m during the fourth quarter of 2015, representing a decrease of 15% over the same period of 2014. Operating EBITDA decreased 25% to US$125m in the fourth quarter of 2015, from US$165m in the fourth quarter of 2014.
Operations in Asia reported a 4% increase in net sales for the fourth quarter of 2015 to US$162m, versus the fourth quarter of 2014, and operating EBITDA for the quarter was US$46m, up by 4% from the same period of 2014.
UNACEM’s profit falls by half in 2015
03 February 2016Peru: UNACEM has reported that its profit fell by over 50% to US$40m in 2015 from US$83m in 2014. The Peruvian cement producer blamed lower output, rising costs and a foreign exchange loss in a report to a regulator.
Sales rose by 3.4% to US$429m in 2015. However, cement production fell by 2.7% to 5.57Mt. Clinker output fell by 7.3% to 5.72Mt. The company attributed this to delays in infrastructure projects such as Line No. 2 of the Lima metro and a decline in homebuilding. Exports dropped by 5.2% to 0.97Mt.
UNACEM said that its domestic market share slipped to 49.6% in 2015 from 49.9% the previous year. Peru's cement production fell 2.5% to 10.4Mt in 2015, according to the cement producers' association Asocem. National exports increased to 0.36Mt from 0.31Mt.
Asia Cement expects loss in 2015
29 January 2016China: Asia Cement expects a loss for 2015 due to lower product selling prices and foreign exchange losses from US Dollar-denominated loans. The producer reported a net profit of US$120m in 2014. Its financial results for 2015 will be released by the end of March 2015.
US: Eagle Materials has reported that its earnings from its cement business rose by 11% year-on-year to US$41.8m in the third quarter of 2015. The earnings increase was attributed to a 4% increase in average net cement sales prices and record quarterly cement sales volumes.
Cement revenues for the third quarter rose by 9% to US$97.1m. Cement sales reached 1.2Mt, a rise of 1% year-on-year. Eagle also reported that its cement businesses in Texas and Oklahoma was impacted by heavy rains in October and December 2015 which resulted in lower sales volumes in both of those markets. Additionally, in Texas, increased demand for construction grade cement continues to offset much of the impact from lower oil well cement demand.
SCG Cement profit drops 22% in 2015
27 January 2016Thailand: The cement business of Siam Cement Group (SCG) reported a 22% decrease in profit in 2015 to US$286m from US$368m in the 2014. Its revenue fell by 3% year-on-year to US$5bn from US$5.2bn. It blamed the performance on poor market recovery in Thailand. Overall, SCG reported increased profits due to its chemicals business.
"As for the progress of SCG's investments in the Association of Southeast Asian Nations (ASEAN), we are continuing as planned and are able to accommodate and meet the market demand dynamics. The cement plant in Indonesia commenced commercial operation in November 2015, while the cement plants in Myanmar and Laos are expected to begin operation in the middle of 2016 and 2017, respectively. These investments are integral to the ability to support our market expansions and serve our ASEAN customers' demands," said Roongrote Rangsiyopash, President and CEO of SCG.
SCG expects that the ASEAN Economic Community will advance its businesses in key export markets in Cambodia, Laos, Myanmar and Vietnam in 2016. Positive economic trends are also anticipated in Thailand due to government stimulus policies and projects.