31 July 2014
Germany: HeidelbergCement has reported that its profit for the second quarter of 2014 declined to Euro233m from Euro368m in the same period of 2013. However, earnings before interest and income taxes (EBIT) grew to Euro527m from Euro511m in 2013. Revenues for the quarter were Euro3.57bn, down from Euro3.59bn in 2013. HeidelbergCement's cement and clinker sales volumes rose by 4% to 22.3Mt compared to 21.4Mt during the second quarter of 2014.
HeidelbergCement announced that it plans to start a process to divest its building materials unit in September 2014 and expects to conclude the sale quickly. Potential buyers include private equity funds, not industrial enterprises, according to Bernd Scheifele, HeidelbergCement's CEO. Scheifele added that HeidlerbergCement would consider buying assets to be sold by Lafarge and Holcim, except for assets located in the UK and Germany.
Italy: Cementir Holding has confirmed that its 2014 earnings before interest, tax, depreciation and amortisation (EBITDA) will exceed Euro180m after posting annual growth of 26.4% in the first half of 2014.
Cementir reported EBITDA of Euro78.4m in the first half of 2014, up from Euro62m in the same period of 2013. Revenues inched up to Euro473m from Euro472m, with sales in Turkey, Scandinavia and the Far East offsetting weaker sales in Italy and Egypt. Net profit rose to Euro20.5m from Euro7.4m in the first half of 2013.
The exchange rates on the foreign markets affected sales in Euros. The currency depreciations to the euro, on the other hand, helped Cementir to cut its operating costs by Euro29.3m from the end of June 2013 to Euro386m at the end of June 2014. Cementir's net financial debt went up by Euro30m from December 2013 to Euro355m at 30 June 2014, as a result of plant maintenance, dividend distribution and changes in working capital.
For 2014, Cementir expects the growth trends in Scandinavia, Turkey and the Far East to continue, while it is difficult to predict the performance in Egypt due to the political and social unrest.
Thailand: Siam Cement has reported a 14% drop in its net profit in the second quarter of 2014. Weak domestic cement demand and lower chemical earnings hit the company after months of political unrest. Thailand's domestic cement demand is expected to grow by 1% at most in 2014 due to a drop in construction activity and a lack of new infrastructure projects, according to Siam Cement's chief executive Kan Trakulhoon.
Siam Cement posted a net profit of US$268m in the April – June 2014 period, down from Euro310m during the same period of 2013. Cement and building materials contributed 41% to Siam Cement's profit and weak domestic demand prompted an increase in exports.
"We export more to ASEAN nations, but we don't make much profit from exports," said Trakulhoon. "This is to help support our supply chain, while we continue to run at full capacity."
Siam Cement expects its performance to be positive in 2014 on expectations that Thailand's 2015 fiscal budget will speed up infrastructure investments, while consumer confidence should recover from the fourth quarter of 2014.
"Domestic cement demand should drop by 2 - 3% in the third quarter of 2014 from a year earlier, while growth in the fourth quarter of 2014 should be flat," said Trakulhoon. He added that cement demand in Thailand for the whole of 2014 would grow by 0 - 1%.
Siam Cement is also stepping up its ASEAN expansion by revising its current US$7.8bn five-year investment plan that kicked off in 2013. The plan is being revised for approval at a board meeting in August 2014. Cement plants in Cambodia, Indonesia, Laos and Myanmar are already in the pipeline, while other building material plants are planned to reduce shipping costs through increased local production.
"There are many opportunities in the ASEAN region, including mergers and acquisitions," said Trakulhoon. "There is no limit. It depends on how fast we acquire the companies. We are open to any acquisition proposals." Trakulhoon added that Siam Cement's primary focus outside of Thailand is on companies in Vietnam and Indonesia, where operations have been especially robust. ASEAN business rose by 20% in the first half of 2014 and now accounts for 9% of Siam Cement's overall sales revenue. That proportion is expected to rise in the coming years.
UK: The construction industry slow-down that started in 2008 led to Hanson Cement, HeidelbergCement's UK subsidiary, laying off 70 employees at its cement plant in Padeswood, Flintshire, Wales. At the time, Hanson considered closing the plant, but instead ran at half capacity in the hope the situation would improve. It has now submitted plans to Flintshire council for a new production line, which the company said would create 35 new jobs, following a building industry upturn.
"It's a good news story considering we've gone through such a depressed period," said Hanson's David Weeks. "We have three plants in the UK; one in Padeswood, one in Lancashire and one in Lincolnshire. We only really needed two and Padeswood would probably have been the one to go. But we decided to hang on in and now we're confident that we'll get Padeswood up to full capacity once again." Hanson Cement said that work will start immediately if it gets the go-ahead.