Saudi Arabia: Saudi Cement recorded sales of US$84m in the first quarter of 2022, down by 49% year-on-year from first-quarter 2021 levels. Its net profit in the quarter was US$16.3m, down by 49%.

Denmark: FLSmidth’s sales were US$670m in the first quarter of 2022, up by 27% year-on-year. Its earnings before interest, taxation and amortisation (EBITA) rose by 59% to US$43m. The supplier’s cement business recorded a sales increase of 10%. This contributed to a continuation in the ‘positive trend’ in earnings from the end of 2021, along with improvements from executed reshaping activities. The business made a property sale worth US$3.27m. In light of the results for the quarter, the company announced that it has maintained its guidance of US$2.49 – 2.71bn consolidated sales and US$783 – 855m in cement business sales in 2022.

Chief executive officer Mikko Keto said “The first quarter of 2022 saw a strong momentum in order intake driven by both mining and cement.” Keto expanded “Our cement business has continued its positive development on improving profitability.”

Regarding the on-going Russian invasion of Ukraine, he said “Our key priority in this challenging time of war has been on the safety and well-being of our employees. We closely follow this tragic situation to ensure we take the right responsible decisions from a humanitarian, legal, and financial point of view.”

Germany: Beumer has announced its acquisition of conveying systems supplier FAM Group. The group says that the two companies complement each other ‘ideally.’ FAM Group employs 750 people in Germany, Brazil, Canada, Chile, China and India, as well as representatives elsewhere. Beumer says that the company’s ‘leading technology’ for transporting and processing minerals fits well with its own portfolio.

Many first quarter financial results for cement producers are out already and what can be seen so far deserves discussion. The first observation is that the sales revenues of Chinese companies have suffered compared to their international peers. As can be seen in Graph 1 (below) CNBM increased its sales slightly in the first quarter of 2022 but Anhui Conch and China Resources Cement (CRC) had significant falls. Stronger results from CNBM’s non-cement production subsidiaries released so far suggest that the parent company’s slow performance is likely due to the cement market. The China Cement Association has reported that national cement output dropped by 12% year-on-year to 387Mt in the first quarter of 2022. It blamed this on the latest local coronavirus wave, limited construction project funds and poor weather.

Graph 1: Sales revenues in the first quarter of 2022 from selected cement producers. Source: Company financial reports. Note: SCG data is for its building materials division only.

Outside of China sales revenue growth has been better with Holcim and Dangote Cement leading the companies presented here. Holcim attributed its success to “strong demand, acquisitions and pricing”. Demand and pricing have been familiar refrains in many of the results reports this quarter. The undertone though has been the destabilising effects upon energy prices by the ongoing war in Ukraine. Holcim’s head Jan Jenisch summed it up as navigating “challenging times, from the pandemic to geopolitical uncertainty.” The producers with operations in the Americas and Europe seem to have coped with this so far mostly due to resurgent markets. Quarterly sales revenue growth for Holcim, CRH (not shown in the graphs) and Cemex each exceeded 10% year-on-year in both of these regions.

The regionally focused companies presented here have suffered more. India-based UltraTech Cement said that its energy costs grew by 48%, with prices of petcoke and coal doubling during the period. Nigeria-based Dangote Cement reported that its group sales volumes were down 3.6% mainly due to energy supply challenges in Nigeria. Internationally, its operations relying on cement and clinker imports – in Ghana, Sierra-Leone and Cameroon – were also hit by high freight rates caused by global supply chain issues. Thailand-based SCG said that national demand for cement demand fell by 3% due to negative geopolitical effects causing inflation, a delay to the recovery of tourism and a generally subdued market.

Graph 2: Cement sales volumes in the first quarter of 2022 from selected cement producers. Source: Company financial reports.

It’s too early to read much into it but one final point is worth considering from cement sales volumes in the first quarter of 2022. They have appeared to fall for the companies that have actually released the data. The reasons for CRC in China and Dangote Cement in Sub-Saharan Africa have been covered above. Holcim’s volume decline was 2% on a like-for-like basis and the others were all very small changes.

To summarise, it’s been a good quarter for those cement producers covered here with operations in North American and Europe. Energy instability caused by the war in Ukraine so far seems to have been passed on to consumers through higher prices with no apparent ill effect. The regional producers have suffered more, with the Chinese ones having to cope with falling demand and the others finding it harder to absorb mounting energy costs and supply chain issues. Plenty more first quarter results are due from other cement companies in the next few days and weeks and it will be interesting to see whether these trends hold or if others are taking place.

India: Krishna Mohan Nendraganti has resigned as the chair and director of Sri Chakra Cement. He cited personal reasons for the departure.

UK: Saxlund has appointed Karen Moore as the chief operating officer of its UK operations. She was previously the finance manager for the company. She holds experience working in a range of financial and management roles across industrial companies, following a career that started in accountancy firms. Moore will report to UK chief executive officer Matt Drew. His job title has changed from managing director to reflect the strategic nature of his responsibilities to the business and as member of the Saxlund Group senior executive management team.

UK: Aggregate Industries’ Cauldon cement plant in Staffordshire has become the first industrial facility to operate a PRISMA liquid air energy storage system. Green technology developer Innovatium developed the product in collaboration with the University of Birmingham. The supplier says that it can deliver 25% energy savings for air compression and will help Aggregate Industries to realise its 2030 goal of 500kg/t of CO₂ emissions for its cementitious products.

Aggregate Industries sustainability director Kirstin McCarthy said “We are very proud to be the first partner to install the PRISMA system in an operational environment. Aggregate Industries is committed to transitioning to net zero, and supporting innovations like PRISMA is vital in helping us achieve that goal. McCarthy continued “We believe PRISMA can play a major role in addressing the ‘energy trilemma’ of managing energy efficiency, energy cost and energy security, and we're confident that its installation at Cauldon will further prove its decarbonisation credentials - a big step towards full commercialisation of the technology.”

Ireland: CRH has completed its divestment of its building envelope business. The group has reported the value of the deal as US$3.8bn.

In February 2022, CRH said that it had entered into a binding agreement to divest the building envelope business to US-based private equity firm KPS Capital Partners. It added that the decision to divest at an ‘attractive valuation’ followed a comprehensive review, demonstrating its active approach to portfolio management, the efficient allocation of capital and the creation of a simpler and more focused group.

China: CNBM’s total operating revenue fell by 1% year-on-year to US$7.29bn in the first quarter of 2022 from US$7.254bn in the same period in 2021. Its operating costs grew by 3% to US$6.90bn. Its net profit fell by 9% to US$420m from US$462m.

China: Anhui Conch’s revenue fell by 26% year-on-year to US$3.85bn in the first quarter of 2022 from US$5.21bn in the same period in 2021. Its net profit fell by 14% to US$773m from US$900m. However, its operating costs fell by 29% to US$2.96bn from US$4.16bn.