Displaying items by tag: Buzzi
Buzzi Unicem makes gains in first half of 2016
04 August 2016Italy: Buzzi Unicem’s sales have risen by 1.9% year-on-year to Euro1.26bn in the first half of 2016 from Euro1.24bn in the same period in 2015. Its cement sales volumes rose by 2.7% to 12.2Mt from 11.9Mt and its earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 33.5% to Euro223m from Euro167m. The group attributed the gains to sales volumes increases in all markets except Italy and Russia. Sales increases were particularly notable in the US and Poland.
Report highlights risks to cement producers from future emissions costs and water use constraints
09 June 2016World: A new report released by the Carbon Disclosure Project (CDP) has highlighted the potential costs of future CO2 emissions and water supply constraints for 12 of the top global cement producers. CDP’s research shows that, even at a US$10/t CO2 price, US$4.5bn could be wiped off profits, with the least efficient companies most at risk.
By compiling questionnaire responses, the report ranks 12 cement producers for performance across five key areas – emissions, energy and material management, carbon cost exposure, water resilience and carbon regulation supportiveness. It found that LafargeHolcim, Shree Cement and CRH were the least CO2- and resource-intensive producers, with Italcementi, Cementir and Taiheiyo Cement the most highly intensive. Several major Chinese and other regional players failed to respond.
CDP found that many of the major cement companies have emissions targets that are set to expire in the next few years. It argues that, with the Paris Agreement driving towards net zero emissions by the middle of the century, cement companies have a ‘historic opportunity to set targets that can ‘future-proof’ their businesses.’
Tarek Soliman, Senior Analyst, Investor Research at CDP said, “This is the first piece of major research to break down how major players in the cement industry are meeting the challenge of reducing emissions in line with the science called for by the Paris Agreement. Cement will be a crucial building block as the Paris Agreement is put into effect, as it accounts for 5% of the world’s man-made emissions. The results couldn’t be clearer for companies and investors: a tipping point for cement companies is not far away.”
“As carbon-related regulatory measures inevitably tighten and the carbon price signal strengthens, investors will expect both strategic and rapid changes from cement companies, including better use of currently available options as well as investment in longer–term ones, whether this be in areas such as low-carbon product development or the deployment of carbon capture, use and storage.”
Italy: Buzzi Unicem’s cement sales have grown by 3% year-on-year to 5Mt in the first quarter of 2016 from 4.9Mt in the same period in 2015. Overall net sales rose by 5% to Euro540m from Euro513m. Its earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 87% to Euro50.8m from Euro27.2m. It attributed the increase in sales to a strong performance in the US where cement sales grew by 16.3% in the quarter. Elsewhere cement sales fell in Russia and Ukraine.
Roundup of non-Chinese cement producers in 2015
30 March 2016LafargeHolcim was the last of the major non-Chinese cement producers to report its annual financial results when it did so on 17 March 2016. With the full set in, as it were, Global Cement will compare the progress of the world’s largest multinational cement companies in 2015.
The first thing to note is that whilst cement production growth rates have hardly been inspiring in 2015, growth or holding the status quo is occurring. The emerging markets have faced challenges in 2015 following the prolonged depression in the construction sector in Europe since 2008. As Wolfgang Reitzle and Eric Olsen put it in the forward of the 2015 LafargeHolcim annual report, “…our share price has been significantly affected, mainly by the volatility associated with emerging markets.”
Figure 1: Cement & clinker sales volumes from five major cement producers, 2011 – 2015. Source: Annual reports. Note: Sales volumes are calculated for LafargeHolcim for 2011 – 2013.
Figure 1 shows cement and clinker sales volumes for the major cement producers from 2011 to 2015. This graph isn’t quite as depressing as it looks because it shows a drop in cement production for the major producers and it has started to show remedial action being taken. Where growth isn’t happening in a market, pressure builds to find it through mergers and acquisitions.
So, Lafarge and Holcim merged and the decision may be now starting to show promise with its sales volumes remaining static year-on-year in 2015 rather than falling. It should be noted here that the drop from 2013 to 2014 is due to the divestments Lafarge and Holcim both made before the merger to satisfy competition bodies and because the sales volumes were calculated here from the separate Lafarge and Holcim annual reports.
Even more so, HeidelbergCement’s plan to buy Italcementi may be a good idea here. Already it has been growing its cement production each year since 2013. The acquisition could potentially speed up the growth considerably. Elsewhere, both Cemex and Buzzi Unicem are showing signs of picking up cement production since 2013.
Figure 2: Earnings before interest and taxation (EBIT) for five major cement producers, 2011 – 2015. Source: Annual reports. Note: Cemex and LafargeHolcim figures have been converted from US Dollars and Swiss Francs respectively at current exchange rates.
Figure 2 shows one indicator of profitability for the major cement producers by comparing their earnings before interest and taxation (EBIT). This is less useful than cement sales volumes because it covers the producers’ entire businesses including aggregate and concrete sectors. However, it does show the problems Italcementi has faced and it offers one reason why the company might have allowed itself to be taken over. Note also how Cemex has continued to increase its EBIT despite its high levels of debts.
Returning to the LafargeHolcim comments about volatile emerging markets, most of the producers reported tough trading in their Asian territories in 2015. The exceptions were Cemex with its reliance on the Philippines booming market and Buzzi with its limited assets in the region. However, Cemex suffered in its own major emerging market in South and Central America. Despite these setbacks though all of the producers featured here benefitted from growing sales volumes in North America, particularly in the US.
Both LafargeHolcim and Cemex announced divestments promptly following their results announcements suggesting that they feel they need to do more to regain the profitability they once had. LafargeHolcim plans to sell assets in South Korea and Saudi Arabia. Cemex has agreed to sell cement plants in Bangladesh and Thailand and a minority stake in its business in the Philippines. This last decision may suggest how serious Cemex is about tackling its debts considering the strong market in that country at present. HeidelbergCement is due to complete its acquisition of Italcementi in the second half of 2016.
Finally, the major changes to the multinational cement producers will continue in 2016 as CRH asserts itself following its major acquisitions from Lafarge and Holcim in 2015. Already its Europe Heavyside Divison reported sales revenue of Euro3.61bn in 2015 surpassing that of Buzzi Unicem. Other international producers such as Eurocement, InterCement and Votorantim were also poised for continuing growing but poor domestic markets (Russia and Brazil) may cripple their ambitions in the short term.
Algeria: Cement production has resumed at the Société des Ciments Sour El-Ghozlane plant following maintenance work and an upgrade to add an electrostatic precipitator filter. The 1Mt/yr plant, a subsidiary of Buzzi Unicem, has been shut for nearly two months causing a shortage of cement in the central region of the country. This has led to some construction projects stalling and the cost of cement rising, according to El Watan.
Buzzi Unicem sales revenue rises by 6.2% to Euro2.66bn in 2015
11 February 2016Italy: Buzzi Unicem has reported that its revenue rose by 6.2% year-on-year to Euro2.66bn in 2015 from Euro2.51bn in 2014. Clinker and cement sales volumes increased by 1.7% to 25.6Mt from 25.1Mt. It attributed the growth to market recovery in the US and Eastern Europe and an additional contribution from the Korkino cement plant in Russia.
Following a sharp drop in business during the first six months of 2015, the group reported that the recovery in international trade recorded in the second half of the year was weaker and less than expected, especially in mature countries. Subsequently, its growth in 2015 was half of its previous estimate. Construction activity in the last quarter of 2015 was bolstered by a dry and mild climate in Italy, Central and Eastern Europe allowing construction activity to remain at levels above the seasonal average.
The group’s net debt fell to Euro1.03bn in 2015 from Euro1.06bn in 2014. It expects from preliminary data that its earnings before interest, taxation, depreciation and amortisation (EBITDA) will be Euro470m in 2015.
Cementir Italia offers Euro125m to buy Sacci cement assets
30 December 2015Italy: Italian cement producer Sacci has accepted a Euro125m offer from Cementir Italia for the acquisition of a branch of Sacci, including assets in the cement, concrete and transport sector, replacing a previous offer presented by Buzzi Unicem. Cementir Italia will pay part of the price at the closing of the operation and the remaining part 24 months later.
Italy's antitrust body opens probe into alleged cement price fixing
27 November 2015Italy: Italy's antitrust authority has opened an investigation into four cement companies for alleged price fixing and, with the tax police, has searched the offices of the companies, according to Reuters. The companies under investigation are Buzzi Unicem, Cementir Italia, Industria Cementi Giovanni Rossi and Holcim Italia.
"The case concerns the possibility of an agreement to coordinate cement sales price increases," said the authority in a statement.
Holcim Italia, part of LafargeHolcim, confirmed the inspections. It said that the company had always acted according to the law and has 'policies and procedures in place that are designed to ensure compliance with principles and rules of fair competition prohibiting anti-competitive behaviour and the abuse of a dominant market position.' Buzzi said that it is confident that it will be able to demonstrate during the investigation that it had always acted in compliance with competition law.
Buzzi Unicem’s revenue grew by 5.2% in the first nine months of 2015
11 November 2015Italy: Buzzi Unicem's profit in the first nine months of 2015 grew to Euro120m from Euro51.4m in the same period of 2014. Its revenues increased by 5.2% year-on-year to Euro1.99m and its earnings before interest, taxes, depreciation and amortisation (EBITDA) rose by 16.4% to Euro352m.
Buzzi said it sees good momentum of demand in the US, but suffered from 'remarkably lower results' in Ukraine and Russia, penalised by the depreciation of the local currencies. Deliveries were subdued in Central Europe, while in Italy cement consumption is still down.
For the whole of 2015, Buzzi confirmed that it expects its recurring EBITDA to improve to approximately Euro450m.
Buzzi Unicem makes binding bid for Sacci units
15 September 2015Italy: Buzzi Unicem has presented a binding offer to buy Sacci's cement and ready-mix concrete units as it pushes ahead with plans to play an active role in the consolidation of the construction materials sector in Italy, according to Reuters. In a statement, Buzzi said that it had offered a provisional price of Euro74m to be financed through liquidity on hand and / or existing credit facilities. A further variable outlay is expected on top of the original commitment, which will be worth no less than Euro25m. This variable outlay is connected to certain future events, most importantly the core earnings, earnings before interest, taxes, depreciation and amortisation (EBITDA), posted in Italy in the next four years.