Items filtered by date: Wednesday 16 May 2012
FLSmidth Q1 profits below forecast 16 May 2012
Denmark: FLSmidth, a supplier of engineering services and equipment to the cement and minerals industries, has kept its outlook for 2012 after first quarter profits rose less than forecast. The company said market trends remained favourable and that a rise in order intake confirmed its growth expectations.
FLSmidth said that it still expected full-year 2012 consolidated revenues of US$4bn, up from US$3.78bn in 2011, and an earnings before interest and tax (EBIT) margin of 9-10% against a 2011 margin of 9.9%. It is also aiming for a 2012 earnings before interest, tax and amortisation (EBITA) margin of at least 10%, against a 2011 margin of 10.9%. First-quarter earnings before interest and tax (EBIT) rose to US$57.7m in January to March 2012 from US$52.4m in the first quarter in 2011.
Nigeria: The Cement Manufacturers Association of Nigeria (CMAN) has disclosed that the sector is poised to receive US$11.4bn in investment as national output reaches at least 45Mt/yr by 2015.
The managing director of Lafarge Cement WAPCO, Joe Hodson, said at a CMAN forum in Lagos that the consumption of cement in Nigeria was currently inconsistent with the existing economic realities in the country and would inevitably rise. He stressed that the per capita consumption of cement in Nigeria was a fraction of that in Egypt providing a lot of potential for development. Hudson noted that, having grown local cement output in Nigeria from less than 10Mt/yr in 2008 to about 28Mt/yr in 2012, the sector had made significant effort to save scarce foreign exchange and helped to create many jobs. However Hudson called on the Federal Government to address a lack of affordable power, lack of transportation infrastructure and dearth of skilled manpower.
The Federal Government responded by stating that it was now set to release the final result of the concession exercise it conducted for three major road construction projects in the country, which are to be handed over to the private sector. These projects included the Second Niger Bridge linking Delta State and Anambra State, the Bridge over River Niger at Nupeku in Niger State and the expansion and upgrade of the Apakun-Murtala Muhammed International Airport Road in Lagos.
Athi River profit grows 17% in Q1 16 May 2012
Kenya: Athi River Mining has posted a 17% rise in first quarter pretax profit to US$4.7m, helped by higher production and growing demand for cement for infrastructure projects.
Kenya's second-largest cement firm, the turnover of which jumped by 61% to US$32m for the quarter ending 31 March 2012, said it would recommend a share split of five for every one ordinary share and a name change to 'ARM Cement Limited' at an annual general meeting scheduled for 24 July 2012. The company also said in March 2012 that it planned to raise US$50m, equivalent to 13.6% of its total equity, through a six-year convertible loan from Africa Finance Corp to finance expansion of its clinker and cement plants later in 2012.
Camargo rejects Cimpor merger proposal 16 May 2012
Portugal: Brazilian construction group Camargo Corrêa, which is trying to take over Portugal's top cement maker Cimpor, has rejected Cimpor management's counter-proposal for a merger with Camargo's cement unit, saying it was 'unrealistic.'
Cimpor's board, which had earlier said the price of Euro5.50/share offered by Camargo was too low, said that a merger would widen Cimpor's portfolio and create better synergies, preventing the withdrawal of another Brazilian shareholder, Votorantim. Its proposal involves paying up to Euro1.00/share in dividends to Cimpor shareholders.
Camargo's unit Intercement responded that the proposal was "untimely, unrealistic and inappropriate as it does not address various interests at play at Cimpor that have already been publicly expressed."
Two key Cimpor shareholders, including state-controlled bank CGD, have already said they are prepared to sell their stakes under Camargo's terms and most analysts expect Camargo to acquire Cimpor at some point. Camargo is already the largest single Cimpor shareholder and the two stakes would give it control. The Portuguese government has said a Cimpor deal has to help CGD to deleverage and defended Camargo's bid from suggestions it was against the national interests. Along with other Portuguese banks, CGD is under pressure to improve its capital position under the terms of a Euro78bn EU/IMF bailout for Portugal.
Previously, Portuguese conglomerate Semapa proposed that some Cimpor shareholders should form a joint holding company to try to keep the company in Portuguese hands. The Portuguese government said that such a move would not help deleverage CGD.
Ash Grove seeks tax break for Midlothian plant 16 May 2012
US: Ash Grove Cement is seeking tax abatement for upgrade projects on its Midlothian plant in Texas. Plant manager Kevin Blankenship presented plans to the Ellis County Commissioner's Court on 14 May 2012.
Ash Grove needs to upgrade its plant in line with Environmental Protection Agency (EPA) regulations that will go into effect September 2013. The company is considering two options that will put the plant in compliance with the new regulations. The first option is to upgrade the plant enough so that it will comply with the new emissions standards. The second option is to fully modernise the plant by upgrading to a single dry kiln and shutting the other two existing wet kilns, a project that would cost US$130m. Since the presentation was not an agenda item at the meeting the court took no action.
The Midlothian plant has been in operation since 1966. Ash Grove currently intend to continue running the plant until 2050, but filed a request to shut the wet kilns in April 2012.
Buzzi Unicem reports Euro45.9m loss in Q1 16 May 2012
Italy: Buzzi Unicem has reported a widened net loss of Euro45.9m for the first quarter of 2012 from Euro32.8m for the same period in 2011, a drop of 29%. The producer, Italy's biggest cement maker by market value, blamed the performance on lower cement demand and the extremely cold winter in Europe.
Net sales fell by 1.3% year-on-year to Euro562.2m. Earnings before interest, tax, depreciation and amortisation (EBITDA) fell by 47.6% to Euro22.4m. The net debt rose to Euro1.21bn at the end of March 2012 from Euro1.14bn at end of December 2011. Buzzi Unicem confirmed it expects to post in 2012 operating results similar to the ones booked in 2011.
Dangote Cement posts US$200m profit for Q1 16 May 2012
Nigeria: Dangote Cement has reported a pre-tax profit of US$200m for the first quarter of 2012, an increase of 8.9% compared to the US$173m recorded for the same period in 2011.
Analysis of the Nigerian producer's unaudited financial results indicated that its operating profits rose by 13.7% to US$200m reflecting the higher proportion of locally manufactured cement compared to US$176m in 2011. Gross profit for the group was US$231m for the quarter compared to US$182m in 2011. The group achieved strong growth in revenue and profits in the first quarter, with revenues rising from US$345m to US$405m, an increase of 17.6%.
CRH set to build on stake in China 16 May 2012
China: Irish building materials group CRH has said at its annual meeting that it planned to increase its stake in the Yatai cement business in China to 49% from 26% as part of a wider push into emerging markets.
Chief Executive Myles Lee said CRH was preparing to exercise an option, opening in January 2013, to raise the stake. "We are setting the scene at the moment for that and we are keen to increase that stake. Obviously in everything valuation is key, so it has to be at a valuation that makes sense for our shareholders," Lee said.
US: The Environmental Protection Agency (EPA) has sent for the White House Office of Management and Budget (OMB) to review its proposed revisions to its emissions rules for the Portland cement sector, ahead of a tentative 15 June 2012 deadline for issuing the revisions in line with a proposed consent decree with the industry.
The pending proposed revised rules undergoing OMB review will address not only the remand but also the EPA's May 2011 partial reconsideration of the cement rules - including standards for open clinker storage piles and start-up and shutdown monitoring requirements - as those provisions included in the recent proposed consent decree with industry.
In the Register notice on the consent decree, the EPA says that it "would also agree to propose to extend the existing source compliance date of 10 September 2013, or in any case to discuss the possibility of extending that date, and to take final action by 20 December 2012 regarding the date of compliance," if such provisions are 'supported by the administrative record.'
While stalling the compliance deadline would be a 'win' for the cement industry, it would likely draw protests from environmentalists supportive of the current air toxics rule. The deadline for comments on the proposed consent decree is 7 June 2012.