Displaying items by tag: Results

Pakistan: Fauji Cement recorded sales of US$226m during its 2022 financial year, more than double its US$101m-worth of sales recorded in its 2021 financial year. The company's net profit was US$29.6m, more than double its 2021 financial year profit of US$14.5m. Fauji Cement's cost of sales also more than doubled to US$166m from US$75.8m.

Pakistan: DG Khan’s revenue grew by 29% year-on-year to US$248m in the financial year to 30 June 2022 from US$193m a year earlier. Its profit for the year fell by 20% to US$12.7m from US15.9m. The main reason for the fall in profit was due to higher taxation in the reporting y

Chile: Cbb has reported a profit of US$2m for the period January - June 2022, which represents a decrease of 74% year-on-year compared US$7.9m during the same period in 2021. The decrease came despite a 15.3% increase in revenues, which rose to US$169m. The company said that the difference could be mainly explained by lower margins from increased distribution costs and administration expenses.

Pakistan: Bestway Cement’s turnover grew by 21% year-on-year to US$460m in the financial year to 30 June 2022 from US$380m in the same period in 2021. Its operating profit rose by 32% to US$85.4m from US$64.4m. Its cost of sales increases by 23% to US$221m from US$180m.

Saudi Arabia: Riyadh Cement Company’s net profit after Zakat and tax shrank by almost 47% to US$22.6m in the first half of 2022, compared to US$42.7m in the same period in 2021. The firm ascribed the drop earnings to lower sales, with its revenues standing at US$68.8m in the first six months of 2022, compared to US$107m in the first six month of 2021, a 36% drop year-on-year.

Indonesia: Semen Indonesia Group has focused on the domestic cement market in the first half of 2022 due to the better availability of coal supplies. Its revenue fell by 2.1% year-on-year to US$1.07bn in the first half of 2022 from US$1.09bn in the same period in 2021. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) remained stable at US$237m. Overall sales volumes of cement dropped by 12% to 17Mt from 19.3Mt. However, domestic sales volumes fell by 2.6% to 14Mt but overseas sales fell by 39% to 3Mt. The group also raised its prices twice in the reporting period to further shore up revenue.

China: Tangshan Jidong Cement’s operating income rose by 3% year-on-year to US$2.44bn in the first half of 2022 from US$2.36bn in the same period in 2021. However, its net profit fell by 7% to US$165m from US$178m. Its sales volumes of cement and clinker dropped by 20% to 38.4Mt from 48Mt. It has a reported clinker and cement production capacity of 110Mt/yr and 176Mt/yr respectively. The cement producer said that demand for cement was weak, especially in April and May 2022, with no seasonal rebound. It blamed its falling profits on geopolitics, coronavirus and a downturn in the real estate sector.

China: Dongwu Cement recorded consolidated sales of US$25.9m in the first half of 2022, down by 26% year-on-year from US$34.8m in the first half of 2021. The company’s loss was US$2.54m, compared to a US$3.76m profit in the previous period. At 30 June 2022, Dongwu Cement’s cement segment’s borrowings were US$14.8m, down by 4.5% from US$15.5m at the beginning of the year.

Morocco: LafargeHolcim Maroc’s sales were US$377m in the first half of 2022, consistent with its first-half 2021 sales, according to the L’Economiste newspaper. In the second quarter of 2022, the producer’s sales fell by 7% year-on-year to US$181m. It attributed this to a drop in its cement sales volumes, amid a national decline in demand of 10% year-on-year during the quarter. During the first half of 2022, Moroccan cement demand declined by 4.5% year-on-year. LafargeHolcim Maroc said that this was the result of global economic factors.

The producer’s net debt was US$590m on 30 June 2022, up by 5% year-on-year.

The larger cement producers in China have published their half-year financial results and the numbers are looking grim. Starting with data from the National Bureau of Statistics of China, cement output in the country fell by 14.5% year-on-year to 979Mt in the first half of 2022 from 1.14Bnt in the same period in 2021. This is the lowest first half output figure since 2012. The decline on a monthly basis started in May 2021 and has carried on consistently since then. Rolling cumulative annual output hit a low of 2.18Bnt in July 2022, the lowest figure since at least the start of 2019 and well before the coronavirus pandemic started.

Graph 1: Cement output in China, 2018 to 2022. Source: National Bureau of Statistics of China.

The financial figures from the cement producers have mostly followed this trend. Of the companies covered here, Anhui Conch’s drop in sales revenue was the most distinct at 30% year-on-year to US$8.14bn. However, Jidong Cement actually managed to increase its revenue and Huaxin Cement’s decrease was fairly small, possibly due to its growing stable of overseas projects. None of these companies could avoid falling cement and clinkers sales volumes though. Again, Anhui Conch is the outlier here with a larger fall in sales volumes proportionally at nearly 40% compared to around 20% for the rest. Chen Bolin, the deputy secretary-general of China Cement Association (CCA), told the 21st Century Business Herald newspaper that of the 20 or so listed cement companies that have published their half-year reports by the end of August 2022, more than half had reported falling sales revenue and net profit and only one company had managed to increase its net profit.

Graph 2: Sales revenue from selected Chinese cement producers. Source: Company financial reports. Note: Cement revenue shown only for CNBM & Taiwan Cement.

Graph 3: Sales volumes of cement and clinker from selected Chinese cement producers. Source: Company financial reports.

The financial reports from the Chinese cement companies detailed here have been fairly light on the reasons for the current state of the sector. Repeated coronavirus outbreaks, instability in the real estate market, a lack of funding for infrastructure projects, growing energy and raw materials costs, pressure on prices and a generally weak economy have all been blamed for the situation. Media channels outside of China have continued to scan the country’s real estate sector for signs of collapse following Evergrande’s problems in 2021. However Chen Bolin diplomatically held back by describing the real estate market as not yet stabilised and a drag on cement demand. Instead he hoped that large-scale infrastructure projects would offer some form of relief.

One last point to note, that both the CCA has made and could be seen in some of the company reports, is that some of the Chinese cement companies are already starting to diversify their businesses. This is in parallel to what some of the larger western-based multinational cement producers have also been doing in recent years with forays into concrete, light building materials and construction chemicals. CNBM already has large concrete, light building materials and engineering subsidiaries. However, Huaxin Cement and Anhui Conch have also started to branch out recently into aggregates, concrete and new energy generation, in the case of the latter company. Things may get worse before they get better, especially depending when or if the Chinese government decides to act on the real estate market. However, whatever kind of adjustment the cement sector may face, there are some signs present already of what some of the companies may do next.