Displaying items by tag: Forecast
Analyst forecasts 100% profit growth in second quarter of 2021 financial year for UltraTech Cement
20 October 2020India: Motilal Oswal Securities predicts that Aditya Birla subsidiary UltraTech Cement’s second-quarter profit is likely to rise by 100% year-on-year in the 2021 financial year, which began on 1 April 2020, to US$161m from US$80.5m in the second quarter of the 2020 financial year. The Economic Times newspaper has reported that the analysts expect an increase in sales of 3.5% to US$1.36bn from US$1.31bn, an increase in cement volumes of 3.9% to 19.4Mt from 18.7Mt, a price drop and a fall in costs in the quarter, which ended on 30 September 2020. The analysts added that cement makers may show volume growth in the seasonally weak quarter due to pent-up demand as the economy has reopened following coronavirus-related disruption.
Global Cement apologies to UltraTech Cement for the previous version of this article that wrongly suggested that the company had made the forecast
US: The Portland Cement Association (PCA) has forecasted a fourth-quarter cement demand decline of 1.5% year-on-year in 2020, slowing to 0.9% throughout 2021. It said that all three of its post-coronavirus economic recovery scenarios involved a decline until mid-2021, primarily due to “weak construction sectors specifically within retail, hotel and office” non-residential markets, though in the best-case scenario a vaccine could prompt a recovery in these sectors, reducing total demand decline to 0.1% in the second half of 2021. A worst-case ‘W-shaped’ scenario would result from state governments implementing second lockdowns.
Senior vice president and chief economist Ed Sullivan said, “We think that the gradual sustained recovery – the 'U' – has the largest likelihood, followed by the 'vaccine' scenario. The growth-interrupted 'W' scenario is the least likely. He said that in each case federal spending in the fourth quarter of 2020 and the first quarter of 2021 would be essential “in preventing a deep and prolonged downturn in economic recovery,” as it did in the second and third quarters of 2020.
China: Gansu Qilianshan Cement has announced that it expects to record a profit of US$208m in the first nine months of 2020, up by 41% year-on-year from US$147m in the corresponding period of 2019, according to Reuters. It said the results would be in line with its growth trajectory thanks to a significant increase in demand towards the end of the first half of 2020.
Huaxin Cement predicts 44% nine-month profit drop in 2020
13 October 2020China: Huaxin Cement has published a figure for its predicted profit for the first nine months of 2020 of US$135m, down by 44% from US$241m in the first nine months of 2019. The company attributed the forecasted decline “mainly to the severe impact of the coronavirus epidemic in the first half of 2020 and the large-scale flooding in the River Yangtze in July.” It added, “The production and sales of the company’s leading products were greatly affected, and prices also fell, resulting in operating income decline.” The company noted that third-quarter profit is expected to increase by 5% year-on-year.
Semen Indonesia forecasts 14% cement demand decline in 2020
08 October 2020Indonesia: Semen Indonesia has said that it expects a 14% year-on-year decline in domestic cement demand to 50Mt in 2020 from 58Mt in 2019. The Jakarta Post newspaper has reported that the coronavirus outbreak was the primary cause of a 7.7% first-half decline in cement consumption to 27Mt from 29Mt.
Marketing and supply chain director Adi Munandir said, “Our projection is based on the delay in private construction projects and the government’s infrastructure development as a result of the Covid-19 crisis. This has caused demand to slump by 8.8% in July 2020, and we expect this slump to continue to the end of the year.” He noted the retail housing market as a potential sales boost, saying, “We saw an uptick in cement bag sales during the first half of 2020, as home renovations rose due to the pandemic.”
Fitch Ratings predicts Indian cement demand fall
22 September 2020India: Credit rating agency Fitch Ratings has forecast a 15% year-on-year decline in domestic cement demand in the 2021 financial year, which ends on 30 March 2021 due to “weak property demand and a sluggish construction cycle.” Fitch Ratings gave the reasons for the decline as “low consumer confidence caused by business uncertainty and unemployment concerns,” causing “underlying appetites of financial institutions to lend to the construction sector to remain weak” in spite of the Reserve Bank of India’s temporary funding relief measures to the sector, which include “loan restructuring, moratoriums and relaxed lending limits.”
Fitch Ratings reported that steel demand will also fall by 10% in the 2021 financial year.
FLSmidth reinstates 2020 guidance
28 August 2020Denmark: FLSmidth has announced the reinstatement of its 2020 guidance. The guidance predicts full-year sales of Euro2.28bn, down by 18% year-on-year from Euro2.77bn. Earnings before taxation, interest, depreciation and amortisation (EBITDA) margin is expected to decline to 6.0% from 8.1%. The company said that the guidance is “subject to higher uncertainty than usual” and conditional upon “no further escalation of Covid-19, no further extensive lockdowns or travel restrictions occurring before year-end, a gradual improvement in business sentiment for the remainder of 2020, and business improvement implementation of around Euro28.2m, of which Euro18.8m relate to the previously communicated improvement activities and around Euro9.40m relate to further improvement activities in cement.” It added, “The cement industry has been severely impacted, and the timing and extent of a rebound remain uncertain. Our goal for the cement business is to generate more stable, higher-margin earnings.”
Australia: Adelaide Brighton has recorded a net profit of US$21.1m in the first half of 2020, compared to a US$13.0m loss in the first half of 2019. Revenues fell by 7.3% to US$508m from US$548m due to a 12% construction decline over the period, according to the company. Residential construction fell by 16%, however mining and infrastructure activity remained consistent with levels in the first half of 2019. Adelaide Brighton said, “Cement demand is likely to continue to benefit from a strong production outlook for gold, nickel, and iron ore in particular, and stable demand from the alumina sector.”
Uzbekistan: Uzbekqurilishmateriallari deputy chair Ulugbek Abrayev has said that Uzbek cement production capacity will total 20.0Mt/yr before 1 January 2021, up by 60% year-on-year from 12.5Mt at the start of 2020. Abrayev added that, due to growing demand, Uzbekistan will produce 14.5Mt in 2021, corresponding to 73% utilisation of projected capacity. A total of ten cement plant projects across eight of the country’s 12 regions are due for completion in 2020 and 2021.
PPC considers US$68.7m rights offer
14 August 2020South Africa: PPC has said that it may issue a rights offer for US$68.7m-worth of shares in order to raise funds to ‘repay and restructure debt locally and in other African markets, and to refinance after the economic effects of the Covid-19 pandemic.’ Pretoria News has reported that PPC has forecasted a 20% year-on-year drop in earnings in the year to 31 March 2020 due to ‘a slump in domestic demand and an influx of cheaper Chinese imports, even prior to lockdown.’