25 July 2014
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.
India: Ambuja Cement has reported a 26% year-on-year increase in stand-alone net profit for the second-quarter of 2014, led by increase in sales and other income. The company posted a second-quarter stand-alone net profit of US$68.0m, up from US$53.9 for the second quarter of 2013. Ambuja Cement's quarterly net sales were US$450m, up by 15% from US$390m in the preceding year quarter, while other operating income was US$2.28m, compared with US$5.48m in the second-quarter of 2013. During the second quarter, sales volumes rose by 8% to 5.79Mt from 5.38Mt in the prior-year quarter.
India: ACC has reported a second quarter 2014 net profit of US$40.1m, some 7% lower than the US$43.1m reported in the second quarter of 2013. The fall in profit was attributed to higher total expenses. ACC also announced that Harish Badami was appointed as CEO and managing director with effect from 13 August 2014.
"Manufacturing and distribution costs continued to face escalation, though we derived some benefits from the ongoing cost leadership programme and an increase in the sales of premium products," said ACC.
Revenue grew by 7.5% year-on-year to US$509m during the second quarter of 2014, aided by higher volumes. Sales volumes increased to 6.35Mt, up from 6.12Mt in the same period of 2013.
"Demand for cement showed some improvement and the company's overall sales volumes during the quarter improved by 4%," said ACC. The company expects the positive trend in demand for cement to continue as a result of government's emphasis on housing and infrastructure development.
Profit before interest and tax from its cement business declined to US$50.7m from US$57.7m year-on-year. Operating profit (EBITDA) dropped by 8% year-on-year to US$74.9m. Total expenses during the quarter increased by 10% compared to year-ago period due to higher raw material and employee costs and increased power, fuel and freight charges. Other expenses grew by 8% year-on-year.