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Vicat reports on first quarter of 2020 07 May 2020
France: Vicat has reported first-quarter sales of Euro615m in 2020, up by 7% year-on-year from Euro600m in the first quarter of 2019. Cement sales grew by 5.5% to Euro319m (52% of total sales), up by 5.5% year-on-year from Euro302m.
Vicat chair and CEO Guy Sidos said, “The Group's performance over the first quarter of 2020 was solid despite a sharp slowdown at the end of the period in France, India and Italy.” In spite of the coronavirus crisis, “Industrial and commercial activity was maintained on almost all sites, in line with market evolutions.” Sidos says that the group expects ‘a significant impact on first-half results’ in 2020.
Pakistan: Producers dispatched 3.52Mt of cement in April 2020, down by 24% year-on-year from 4.61Mt in April 2019. Domestic consumption was 3.27Mt, down by 19% from 4.04Mt due to the coronavirus outbreak. The Business recorder newspaper has reported that cement producers were already ‘struggling to survive due to extremely high input costs.'
The All Pakistan Cement Manufacturers Association (APCMA) said, "The decline in construction activities around the world, including in Pakistan, contributed to a downfall in demand, however, the cement sector even otherwise was operating under acute distress."
India: Construction has stalled in Tamil Nadu because consumers are reportedly unable to buy cement. The supply chain has been disrupted because police have shut shops across the state following breaches of social distancing rules after the partial easing of the coronavirus lockdown.
Ramco Cements Managing Director Arrakundal Dharmakrishnan said, “We have instructed our dealers that they must follow social distancing norms.”
In neighbouring Telangana, chief minister Kalvakuntla Rao has extended the lockdown period to 29 May 2020, subject to a review on 15 May 2020 that may result in the resumption of construction works and the re-opening of non-essential shops.
US: Switzerland-based LafargeHolcim has named the eight recipients of its 38th annual Gygi and von Wyss Foundation Scholarship. LafargeHolcim subsidiary US Cement CEO Jamie Gentoso said, “It’s essential to invest in the education of the next generation and, with the rising costs of higher education, scholarships are more important than ever to help reduce the impact and assist in these students’ success.” Under the scholarship scheme, children of LafargeHolcim employees in the US can receive US$6000 towards higher education for a year and again for three subsequent years subject to academic performance.
LafargeHolcim reacts to coronavirus
Written by David Perilli, Global Cement
06 May 2020
LafargeHolcim’s first quarter results last week bore all the signs of a prizefighter on the receiving end of a punch. It’s taking pain now but it’s likely to be temporary. A volley of market disruption caused by coronavirus-related government lockdowns can be seen wreaking havoc steadily across its different geographical reporting areas. Asia Pacific region has been most affected so far, followed by its Middle East Africa, Europe, South America and North America regions. That last one didn’t show any top-line financial effects from health control measures, although they are surely coming. The worst is yet to come as chief executive officer (CEO) Jan Jenisch said, “The biggest impact from Covid-19 is expected in Q2. The full impact of the crisis on the company’s 2020 results cannot be assessed at this point.”
Depending on how easing the lockdowns plays out, LafargeHocim’s multinational nature may cushion it from the worst effects. Despite the group’s cement sales volumes falling in the first quarter in most regions on a like-for-like basis, it performed strongly in North America with an 8% rise year-on-year to 3.6Mt. Aggregate and concrete volumes were also up, as well as net sales and earnings before interest, taxation, depreciation and amortisation (EBITDA). Sadly, this is about to change. Most of Europe brought in its lockdown measures in early to mid-March but the US enacted its own lockdown later. The group was quick to point out that it had found the April 2020 data on the rebound of activity in China ‘encouraging.’ If this is the pattern for all regions and second waves are suppressed without resorting to more lockdowns then the group’s wide geographical presence may help it.
As discussed a few weeks ago the major multinational building materials producer is actually in a better position for the unexpected given its success in reducing its debt levels in recent years, notably following divestments in South-East Asia in 2018 and 2019As discussed a few weeks ago the major multinational building materials producer is actually in a better position for the unexpected given its success in reducing its debt levels in recent years, notably following divestments in South-East Asia in 2018 and 2019. Naturally, it was keen to point this out in its press release with talk of its net financial debt to recurring EBITDA of 1.5x as at the end 2019, liquidity of Euro7.5bn in cash and credit lines and a Baa2/outlook stable credit rating from Moody’s in late April 2020. That sense of confidence was later reinforced with, “The building industry is resilient and expected to benefit from future recovery plans from governments and central banks.” This last point is important given that most economic recovery plans tend to involve building things.
HeidelbergCement’s financial results for the first quarter of 2020 are due out on 7 May 2020. Once these come in, some sort of comparison between the larger multinational cement producers, including Cemex and CRH, will be possible. However, the different geographical footprint of each of these companies will hinder this kind of analysis given the progressive way the coronavirus outbreak has spread. In the meantime check out Global Cement Magazine’s feature on the North American cement market (written before the lockdowns) and be sure to register for Global Cement Live this week, which includes an update on the US from consultant John Kline.