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Anglo American reports 48% increase in profit 28 July 2014
US: Anglo American plc has reported 48% growth in its first half of 2014 pre-tax profit. Its underlying operating profit declined as revenues were hurt by lower commodity prices, despite increased production. Anglo American has also signed a binding agreement for the sale of its 50% stake in the Lafarge Tarmac Holdings Ltd joint venture in the UK for at least US$1.50bn.
During the first half of 2014, Anglo American's pre-tax profit climbed to US$2.95bn from US$1.99bn in the same period of 2013. Special items and re-measurements, including the attributable share of associates and joint ventures and after tax and non-controlling interests, amounted to a gain of US$180m, compared to a loss of US$847m in 2013. Underlying earnings were US$1.28bn, some 3% higher than the US$1.25bn that was reported in the same period of 2013.
Underlying operating profit fell by 10% to US$2.93bn from US$3.26bn in 2013. Lower realised prices of commodities resulted in a reduction of US$1bn in underlying operating profit. Group revenue, including associates and joint ventures, declined slightly to US$16.1bn from US$16.2bn in 2013, which was attributed to a drop in many commodity prices, continuing weak global economic growth and increases in seaborne commodity supply.
"As we look at the global economic outlook, uncertainty is likely to persist for the balance of 2014, though there are some encouraging signs that activity is strengthening in our key markets," said Anglo American's CEO Mark Cutifani said. "Over the long term, we expect new supply to be constrained and to see tightening market fundamentals and a recovery in price performance."
India: JK Lakshmi Cement has reported a 31% turnover increase to US$111m in the second quarter of 2014, which ended on 30 June 2014, compared to US$85.0m in the corresponding quarter of 2013. The increase was attributed to 14% growth in production and an 18% increase in sales volumes.
JK Lakshmi Cement's operating profit during the quarter stood at US$19.3m. This represents a 58% increase compared to the same period of 2013, when operating profit was US$12.2m. After providing for interest and depreciation, the company's pre-tax profit rose to US$11.0m, compared to US$2.96m in the same period of 2013. After accounting for exceptional items and tax, JK Lakshmi Cement posted a net profit of US$6.73m for the second quarter of 2014, up from US$2.61m in the corresponding quarter of 2013.
JK Lakshmi Cement has reduced its fuel consumption to 715,000Cal/Kg of clinker in the second quarter of 2014, compared to 731,000Cal/Kg of clinker in the corresponding quarter of 2013. It has also reported satisfactory progress in its 2.7Mt/yr capacity greenfield cement plant in Durg, Chhattisgarh, which is expected to be commissioned in the third quarter of 2014.
UAE: During the first six months of 2014, Union Cement Company (UCC) achieved a net profit of US$16.2m compared to US$5.76m during the same period of 2013, a 181% year-on-year increase. UCC's second quarter 2014 results, which ended on 30 June 2014, showed a net profit of US$11.2m compared to US$4.22m during the same period of 2013.
Lafarge reports 2% fall in EBITDA 25 July 2014
France: Lafarge has posted another drop in quarterly sales and profit, mainly due to adverse exchange rates and its shrinking scale as it sheds assets to trim debt. It said that its planned merger with Holcim is on track and that its banks would give detailed information 'in the coming days' to potential buyers regarding the assets it plans to sell.
Lafarge's earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 2% to Euro812m in the second quarter of 2014 as sales fell by 5% to US$3.37bn. Lafarge said that it expected a smaller impact from adverse foreign exchange rates on its performance in the second half of 2014, after a drop in both sales and EBITDA in the second quarter. Lafarge aims to bring debt below Euro9bn in 2014 and confirmed that it expected cement demand to grow by 2 - 5% in its main markets.
"The situation in North America is improving, growth continues in emerging markets and we see the first signs of recovery in Europe," said Lafarge's chief executive Bruno Lafont. He cited Poland, the UK and Greece as countries showing improvement. However, the construction sector remains subdued in France.
Colombia: Cementos Argos has reported an 87% increase in its net profits for the second quarter of 2014. This was driven by the positive behaviour in its main markets, most notably in the US, as well as an organisational excellence plan that has allowed the company to improve efficiency in various aspects.
Corporate earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the second quarter of 2014 rose to US$142m, some 11% more than in the same period in 2013. EBITDA for the first half of 2014 reached US$272m, despite non-recurring expenses of US$20m that mainly stemmed from recent acquisitions. After integrating the cement and concrete assets that were acquired in Honduras, the US and French Guiana, consolidated revenues for the quarter grew by 18%, while cement sales volumes rose by 9.3%.
"The results that were recorded for this second quarter came from a solid demand in most of the geographies in which we operate," said Jorge Mario Velásquez, Argos' CEO. "It is especially satisfactory to see the recovery of profitability in the United States, the successful integration of the company's recent acquisitions and the strategic advantage that Argos draws from the fact that it operates in 12 countries that have dynamic markets and different economic cycles."
In the US its EBITDA generated during this second quarter of 2014 was nearly twice as high as the EBITDA recorded for the whole of 2013. The country's performance was driven by increasing sales volumes during the first half of 2014, with an upturn of 59% for cement dispatch.
In Colombia, cement sales volumes increased by 3% and revenues amounted to more than US$604m for the first half of 2014, which was a result similar to 2013. During this period, Cementos Argos recorded a bigger increase in sales of the bulk cement segment and in concrete dispatching, as well as positive trends in housing construction, thanks to the approval of an increased number of building permits and the continuation of mortgage subsidies.
In the Caribbean and Central American Regional Division, revenues rose by 20% and EBITDA improved by 38% in the first half of 2014, reflecting the positive effect of including the results of the plant in Honduras and of the cement grinding plant in French Guiana.