Displaying items by tag: Results
China: China Shanshui Cement’s revenue grew by 19% year-on-year to US$2.63bn in 2018 from US$2.2bn in 2017. Its profit from operations nearly doubled to US$563m from US$295m. It reported growth in most of its operating regions, with the exception of Xinjiang Region, where revenue fell slightly to US$71.1m. It attributed its overall sales revenue growth to raised prices.
Cemex makes progress towards divestment target
22 March 2019Mexico: Cemex says it has made ‘significant’ progress towards its US$1.5 – 2bn asset disposal target by the end of 2020. Since the target was announced in mid-2018 the group has announced the divestment of assets in northern Europe, a terminal in Manaus in Brazil, aggregates and ready-mix concrete (RMX) assets in Germany, its white cement business including the Buñol cement plant in Spain and other assets. These sales will generate around US$750m or half of its lower target.
“We remain completely committed towards the goal of achieving an investment grade capital structure and will continue our disciplined deleveraging and improvement of our capital structure,” said Fernando A Gonzalez, the chief executive officer (CEO) of Cemex.
Titan profit growth driven by grew US in 2018
21 March 2019Greece: Titan Group’s profit growth in 2018 due to by its US operations. However, negative currency exchange rate effects have dragged on its financial results. Overall, its turnover fell by 1% year-on-year to Euro1.49bn in 2018 from Euro1.51bn. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) decreased by 5% to Euro260m from Euro273m. However, its net profit rose by 26% to Euro53.8m from Euro42.7m.
By region, the US region reported rising turnover and stable EBITDA in US Dollar terms. An improvement in results was recorded in Florida, counterbalanced the lower profitability of the mid-Atlantic region, which was affected by protracted inclement weather and an increase in competition in the broader New York area. The market remained poor in Greece with falling turnover and earnings. Markets in south-eastern Europe recorded increases, although rising energy costs wee a concern. Continued problems were reported in Egypt and Turkey due to additional input costs and market conditions respectively.
China: West China Cement’s sales revenue rose by 24% year-on-year to US$881m in 2018 from US$709m in 2017. Its cement sales volumes fell by 3.2% to 18.1Mt from 18.7Mt. Its earnings before interest, taxes, depreciation and amortisation (EBITDA) grew by 40.6% to US$393m from US$279m. Despite falling sales volumes, the cement producer said that increased prices boosted its margins.
By region the company said that sales volumes in Shaanxi Province remained stable, while the continuous low demand in the Xi’an Metropolitan Area and Central Shaanxi region led to occasional peak-shifting production halts by all producers during low season periods. Sales volume in Xinjiang Province remained low, while that of Guizhou Province were stable.
Tianrui Cement grows sales due to price hike
18 March 2019China: Tianrui Cement sales revenue rose by 19.5% year-on-year to US$1.5bn in 2018 from US$1.25bn in 2017. It attributed the growth to a 15% increase in the price of cement. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) grew by 15.3% to US$573m from US$497m. Its sales volumes of cement remained stable at 29.4Mt compared to 29.3Mt in 2017.
Tanga Cement reduces losses in 2018
14 March 2019Tanzania: Tanga Cement says it expects to reduce its losses by around 50% in 2018. It said that the local cement market improved notably in 2018 and that the cement producer improved its trading results and profitability, according to the Daily News newspaper. In 2017 the company reported a loss of US$11.5m due to local competition.
2018 for the cement multinationals
13 March 2019All the major multinational cement producers reported growing sales in 2018. Yet, the big growth was found outside of Europe, with China Resources Cement (CRC), Ultratech Cement and Dangote Cement all posting sales revenue growth of above 10%. Similarly, cement sales volumes continued to rise. CRC and Ultratech Cement were the standouts here, with the latter benefitting from its acquisitions including, most recently, Binani Cement. Concrete sales volumes were the same, rising for all the companies with the exception of Buzzi Unicem. It suffered market issues in Italy and Germany.
Graph 1: Sales revenue from selected multinational cement producers in 2017 and 2018 (Euro billions). Source: Company financial reports.
Graph 2: Cement sales volumes from selected multinational cement producers in 2017 and 2018 (Mt). Source: Company financial reports.
Graph 3: Ready-mixed concrete sales volumes from selected multinational concrete producers in 2017 and 2018 (Mm3). Source: Company financial reports.
With the major Chinese producers, including CNBM and Anhui Conch, yet to release their annual results for 2018, CRC is included in this roundup to give an idea of how that market is performing. Both CNBM and Anhui Conch have released profit alerts anticipating bumper results in 2018 though. This is likely due to boosted local cement prices.
The major story for the European-based producers was one of asset sales and debt reduction. LafargeHolcim returned to positive income in 2018 with a focus on its Strategy 2022 programme. HeidelbergCement’s earnings were hit by poor weather in the US and insufficient divestments. Cemex, although based in Mexico, retains a significant European presence and so it included here. It suffered from poor sales outside of its base in Mexico and the US. CRH continued on its trajectory as the world’s biggest building materials company with solid sales and earnings growth. Interestingly though given its expansion strategy in recent years CRH’s debt to earnings before interest, taxation, depreciation and amortisation (EBTIDA) ratio remains better than the other three majors above, even after its purchase of Ash Grove Cement in mid-2018 taken into account. Although other financial comparisons are worth considering, such as EBITDA margin.
Despite Cemex’s relatively high net debt compared to its peers it has been cutting its debt the fastest, at 8% to US$10.4bn in 2018. Its current plan is to reach an ‘investment-grade’ balance sheet by 2020. LafargeHolcim and HeidelbergCement are in ‘cuts’ mode leading to all sorts of speculation about where they might sell next. The wilder rumours in the press include preparations by LafargeHolcim to sell its entire operation in the Middle East and Africa. Similar tales about a sale in the Philippines are more credible but remain unconfirmed. HeidelbergCement is keeping its cards closer to its chest but poor performing territories that might be up for sale include some of its Italian plants and parts of Africa.
Of the larger producers without a European presence, Ultratech Cement has been negatively effected by energy costs during the nine months to the end of 2018 with its income and EBITDA down. Dangote Cement’s performance in 2018 was driven by sales at home in Nigeria although earnings elsewhere continued to grow.
With all of this in mind the scene appears set for a breakout by a major Chinese producer to buy a big bolt-on acquisition or expansion by regional or national players along the lines of that seen by Semen Indonesia or UltraTech Cement. Taiwan Cement has been ahead here with its purchase of a 40% stake in Turkey’s Oyak Cement but what we’re really waiting for is a majority position within a country or territory. At which point CNBM and the like will have earned its place in the 2019 version of this article. Perhaps the age of truly multinational cement producer is coming to an end as regional players become more prominent.
Sinai Cement reduces loss in 2018
12 March 2019Egypt: Sinai Cement has reduced its net loss to US$17.6m in 2018 from US$20.4m in 2017. Its revenue decreased by 38% year-on-year to US$46.1m from US$74m, according to Mubasher. The company has blamed its financial results on the role of negative currency effects on imported fuel costs. Although this was partly offset by rising cement prices.
China Resources Cement benefits from price rises in 2018
11 March 2019China: China Resources Cement’s turnover rose by 29.5% year-on-year to US$4.94bn in 2018 from US$3.82bn in 2017. Its profit jumped to US$1.02bn from US$0.46bn. Its cement sales volumes grew by 9% to 82.6Mt from 75.9Mt. Cement sales volumes grew in all regions except for Hainan and Yunnan, where they declined slightly. Its concrete sales volumes increased by 5.7% to 14.2Mm3 from 13.5Mm3. No reason for its growth in 2018 was given but the producer’s average sales price of cement grew by 25%.
The cement producer is upgrading 106 cement bagging machines in the reporting year as part of its ‘digital’ cement-bagging project. It completed the construction of three sets of wet-process desulphurisation systems and 11 sets of composite desulphurisation systems. It launched co-processing projects in Changjiang County in Hainan, Tianyang County in Guangxi, Midu County in Yunnan and Fengqing County in Yunna.
Saudi Arabia: Southern Province Cement’s sales fell by 16.5% year-on-year to US$237m in 2018 from US$283m in 2017. Its net profit after Zakat and tax nearly halved to US$52m from US$98.7m. The company blamed the fall in sales and profit on lowering prices, despite higher sales volumes.
The cement producer has also announced renewal of its export licence from the Ministry of Trade and Investment. It will export up to 1Mt of clinker and 0.5Mt of cement for a year from 13 February 2019.