Displaying items by tag: Results
Breedon benefits from Lagan purchase
05 September 2018UK: Breedon Group has reported its first half results for 2018, which showed a 16% year-on-year increase in revenue to Euro419.3m and a 3% fall in profit before tax to Euro33.7m. The group completed the acquisition of Ireland-based Lagan Group during the period under review, as well as other companies in the UK.
Peter Tom CBE, Executive Chairman, commented, “This was one of the busiest periods in the Group’s history, with four acquisitions completed by 1 July 2018, including our first outside Great Britain, coupled with continued organic investment in a number of key projects. We had anticipated a challenging 2018 and so it proved in the first half, with testing trading conditions exacerbated by the severe weather in the first quarter and rising input costs throughout the period. Despite these headwinds, we delivered a resilient performance.”
“We continue to view the medium- to long-term outlook in Great Britain positively, with infrastructure spending forecast to increase steadily over the next three years and government strategies to address our chronic housing shortage expected to fuel continued growth in the residential sector. Market conditions in Ireland are expected to be even healthier, with construction output in the Republic forecast to grow by approximately 28% in the three years to 2020 and Northern Ireland expected to sustain construction output at approximately Euro3.33bn/yr from 2018 to 2022.”
Argos sees 23% profit growth in Dominican Republic
05 September 2018Dominican Republic: Colombia’s Cementos Argos has announced that it recorded positive results in the Dominican Republic during the first half of 2018. In this period, the company saw overall revenues experience a year-on-year increase of 7%, while net profits expanded by 23%. These positive results helped the company to report a good performance in its Caribbean-Central American regional operations, which recorded earnings before interest, tax, depreciation and amortisation (EBITDA) of US$99m and revenues of US$299m in the period under review, marking increases of 3.9% and 2.6%, respectively.
Polpaico profit up by a half
03 September 2018Chile: Cemento Polpaico, part of LafargeHolcim, reported a profit of US$5.93m in the first half of 2018, a 52.6% rise with respect to the US$3.9m profit it achieved in the first half of 2017. Its operating revenues from continuing activities were US$120.7m, a 32.2% year-on-year increase.
The company reported that the higher operating revenues were mainly due to an increase in sales volumes of cement and concrete, driven by the greater economic activity.
Boral reports mixed picture for cement business
30 August 2018Australia: Boral’s cement business, Boral Australia, reported a 2% year-on-year rise in cement sales volumes in the financial year to 30 June 2018. Its external sales fell but this was compensated for by growing local sales in support of its concrete business. It’s said that the earnings and margins for its cement business improved due to an improvement programme. However, these benefits were partly offset by cost inflation and higher energy costs.
Overall, Boral Australia’s sales revenue rose by 34% year-on-year to US$2.62bn in the financial year to 30 June 2018 from US$2.40bn in the same period in 2017. Boral Australia’s earnings before interest, taxation, depreciation and amortisation (EBTIDA) increased by 15% to US$462m from US$402m. Total group sales rose by 34% to US$4.28bn and EBITDA grew by 47% to US$770m due to the acquisition of Headwaters.
“We have continued to optimise our networks and grow volumes in Australian east coast markets, where demand is very strong, and we continue to focus on full cost recovery through price and strengthening margins through improvement programs,” said chief executive officer and managing director Mike Kane.
Strike at ANCAP hits cement sales in first half
30 August 2018Uruguay: An 88 day strike has reduced cement sales at Administración Nacional de Combustibles, Alcoholes y Portland (ANCAP). Its cement sales fell by 24.1% year-on-year to 0.12Mt in the first half of 2018 from 0.16Mt in the same period in 2017. Despite this, the loss from its cement business decreased to US$3.4m from US$6.06m. Its earnings were also negatively affected by rising petcoke prices. Overall, the oil and gas company reported a profit of US$52.6m across all business lines.
CNBM marks its place as the world’s largest cement producer
29 August 2018The world’s largest cement producer China National Building Material (CNBM) released its half-year results this week and the figures were generally good. Despite falling production, the state-owned company has managed to raise its prices year-on-year to generate significant sales revenue and earnings increases. As usual the level of detail was fairly light, although not much lighter than some non-Chinese producers on the international market. The key point was that cement production fell by 5% year-on-year to 143Mt. This was due to poor demand, mounting environmental regulations and rising input costs.
The half-year report was significant because it is the first financial report from the company since its merger with China National Materials (Sinoma) completed in early May 2018. Just like the reports of LafargeHolcim and HeidelbergCement following mergers or acquisitions, CNBM has seen a boost to its performance. Further gains from scale and synergy are expected. The union has indisputably created the world’s biggest cement producer, putting aside any European or American cries of over-calculation of production capacity on the part of their Chinese rivals. However, size comes with particular problems.
Placed in a wider context CNBM and its owners, the Chinese government, are attempting to manage a wind-down from the biggest construction boom in human history. National Bureau of Statistics data show that sales of cement fell by 10% to 984Mt in the first half of 2018 from 1.1Bnt in the same period in 2017. So, falling cement production volumes are not a surprise. What is curious, though, is how cement prices have appeared to rise in a country with massive production overcapacity. Each of CNBM’s cement producing subsidiaries reported that its average selling price of cement grew year-on-year.
Graph 1: Sales of cement in China, 2014 – 2018. Source: National Bureau of Statistics of China.
Regional variation could explain some of this in a country as large as China and similar trends can be observed in India with its own diverse internal markets. The local focus on environmental regulations offers another explanation. In June 2018 the government’s State Council issued regulations to reduce the production capacity of construction materials, set up emission limits for pollution, implement peak shifting of production and to establish a ‘strict’ accountability mechanism for all of this. CNBM has followed these directives with its ‘Price – Cost – Profit’ (PCP) strategy and all of its subsidiaries have conformed to this. What is not covered in the report is whether there is a negative financial effect of peak shifting and other environmental regulations and how bad this is.
It’s easy to dismiss the performance of a state-controlled company but the enlarged CNBM is facing a unique set of challenges. It appears to be off to a great start but both its scale and its challenges are unprecedented. In its outlook for the second half of 2018 it said that the, “contradiction of overcapacity in the industry has not been changed fundamentally.” This suggests that, although cement prices and profits have held up so far, there is no guarantee that this situation will continue.
CNBM’s cement production drops due to poor demand and environmental regulations in first half of 2018
28 August 2018China: China National Building Material’s (CNBM) cement production volume fell by 5% year-on-year to 143Mt in the first half of 2018 from 150Mt in the same period in 2017. It has attributed this decrease to ‘flat’ demand, increased pressure on environmental protection and rising costs of fuel and raw materials. As part of its ‘Price – Cost – Profit’ (PCP) initiative the group has focused on reducing production capacity and output, implementing peak shifting production and eliminating old production facilities.
Despite the headwinds, the group’s sales revenue from its cement division rose by 22% to US$7.41bn from US$6.06bn. Its adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) increased by 38% to US$2.08bn from US$1.51bn. Average cement prices also rose year-on-year. External sales from its engineering companies increased by 13% to US$2.18bn from US$1.92bn. Overall, group sales revenue rose by 22% to US$14bn from US$11.5bn.
CNBM completed its merger with China National Materials Company (Sinoma) on 2 May 2018. Its cement producing subsidiaries include China Untied, South Cement, North Cement, Southwest Cement, Sinoma Cement, Tianshan Cement, Ningxia Building Materials and Qilianshan. Its engineering subsidiaries include Sinoma International, China Triumph and Sinoma Milling.
China: Huaxin Cement’s sales rose by 27% year-on-year to US$1.75bn in the first half of 2018 from US$1.38bn in the same period in 2017. Its net profit nearly tripled to US$304m from US$107m. Its cement and clinker sales volumes grew by 1.13% to 32.2Mt.
The cement producer said that it had been challenged by raw materials and fuel price rises and kiln suspensions due to government-mandated peak shifting production during the reporting period. However, measures such as higher alternative fuels co-processing rates and efficiency gains helped to bolster its financial performance. Its kiln waste processing volumes increased by 18.4% to 0.68Mt.
The company added that its Tibet Shannan 3rd Phase 3000t/day clinker production line was ‘proceeding smoothly’ and was scheduled to start operation by the end of August 2018. Its 4000t/day Yunnan Luquan clinker line and 2.85Mt/yr Huangshi clinker replacement line projects have started construction. In Nepal a 2800t/day clinker line is scheduled to start construction by the end of the year. It is also working on municipal solid waste (MSW) projects in Wuhan Changshankou and Lijiang.
Malaysia: Repair costs at Cahya Mata Sarawak’s (CMS) Kuching cement plant have reduced the profits of the company’s cement division. The planned maintenance period in January and February 2018 was the first major shutdown carried out by the group since it purchased the integrated unit in 2007. The division’s performance was also hit by an increase in the price of imported clinker due to a reported ‘tight supply’ in the international market. The division’s profit before tax fell by 17% year-on-year to US$9.56m in the first half of 2018 from US$11.5m in the same period in 2017. However, its revenue grew by 8%.
Overall, CMS reported revenue growth of 15% to US$183m and a pre-tax profit increase of 32% to US$42.9m. It attributed the strong performance to its other subsidiaries.
CRH first half results dented by poor weather
23 August 2018Ireland: CRH’s financial results for the first half of 2018 have been negatively affected by poor weather in Europe and North America. Its sales revenue rose by 1% year-on-year to Euro11.9bn in the reporting period. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) increased by 1% to Euro1.13bn from Euro1.12bn.
“We have had a good first half, despite significant weather disruption in Europe and North America in the first quarter. Construction markets continued to recover and pricing gathered momentum in key European markets, while there was solid volume and price growth against a positive economic backdrop in the Americas,” said chief executive Albert Manifold. He added that the company was experiencing ‘challenging’ conditions in the Philippines.