Displaying items by tag: Results
Huaxin Cement’s half year results bounce off higher prices
01 September 2017China: Huaxin Cement’s sales revenue rose by 63% year-on-year to US$1.43bn in the first half of 2017 from US$874m in the same period of 2016. It attributed the growth to an increase in the price of cement. The cement producer also benefited from its acquisition of Lafarge China Cement’s plants in Yunan, Guizhou and Chongqing. During the reporting period its cement and clinker sales rose by 33% to 31.8Mt.
Australia: Boral Australia’s external revenue for its cement business remained flat at US$240m in the company’s financial year, which ended on 30 June 2017. The company said that its external revenues were steady, underpinned by a 2% price increase and lower wholesale volumes to support higher volumes of cement sold internally. Total sales volumes of cement rose by 2%. Its cement businesses earnings grew supported by price and volume gains as well as productivity and material input cost benefits, partially offset by higher energy costs. Overall, the division’s total revenue rose by 1% year-on-year to US$2.61bn from US$2.60bn.
Cahya Mata Sarawak profit jumps up by factor of eight
29 August 2017Malaysia: Cahya Mata Sarawak's (CMS) net profit jumped more than eight times to US$15.2m in the second quarter of 2017, from US$1.8m in the same quarter of 2016. The positive result was mainly due to lower handling costs, cheaper imported clinker and lower clinker production costs brought about by stable production and lower coal prices. The net profit for the six-month period was also higher by more than nine times at US$20.5m from US$2.1m in the first half of 2016. Total first half revenue decreased by 10% year-on-year to US$157.1m from US$174.7m.
CRH’s European Heavyside division stagnates so far in 2017
24 August 2017Ireland: CRH’s sales revenue from its Europe Heavyside division, which includes cement production, fell by 2% year-on-year to Euro3.35bn in the first half of 2017 from Euro3.41bn in the same period of 2016. The group described the situation in Europe as ‘stabilising,’ with market recovery reported in Ireland, France, Finland and Poland. However, its earnings before interest, taxation, depreciation and amortisation (EBITDA) remained static at Euro352m. Overall the group’s sales rose by 2% to Euro13bn and its EBITDA rose by 5% to Euro1.18bn.
"We have had a satisfactory start to 2017 with stabilising trends in key European markets and EBITDA growth in the Americas,” said chief executive Albert Manifold. “For the second half of the year, despite currency headwinds and continuing challenging conditions in the Philippines, we expect a continuation of the first half momentum experienced in Europe and EBITDA growth in the Americas, which will result in another year of progress for the group."
The group’s America Materials division’s sales rose by 6% to Euro3.17bn and its EBITDA rose by 15% to Euro288m. It reported that residential and non-residential demand increased and that publicly funded infrastructure activity remained stable in the US. However, its cement volumes fell by 1% due to declines in Ontario and Quebec, although this was partly offset by increases in the US market. In Asia the group’s sales fell by 11% to Euro244m in part due to lower sales volumes of cement in Philippines with falling prices and higher fuel and power costs.
Half-year update on China
23 August 2017There is plenty to mull over on the Chinese cement market at the moment as the half-year reports for the major cement producers are being published. Anhui Conch revealed this week a glowing balance sheet with a 33% jump in its sales revenue to US$4.79bn. It attributed the boost to a ‘significant’ increase in prices and continued discipline with production and operation costs. Although CNBM is scheduled to release its results at the end of August 2017, Anhui Conch appear to be well ahead of its next largest rivals locally as can be seen in Graph 1.
Graph 1: Sales revenue of major selected Chinese cement producers. Sources: Company financial results.
Beyond the headline figures it is interesting to pinpoint the areas in China where Anhui Conch says it isn’t doing as well. Its South China region, comprising Guangdong and Guangxi provinces, suffered from competition in the form of new production capacity, which also in turn dented prices. Despite this ‘black spot’ in the company’s regional revenue still grew its sales in double-digits by 14%.
The other point to note is the growing number of overseas projects with the completion of a cement grinding plant in Indonesia, new plants being built in Indonesia, Cambodia and Laos, and projects being actively planned in Russia, Laos and Myanmar. The cement producer also opened seven grinding plants at home in China during the reporting period. It’s not there yet but it will mark a serious tipping point when the company starts to open more plants outside of China than within it. With the government still pushing for production capacity reduction it can only be a matter of time. On that last point China Resources Cement (CRC) reckoned in its half-year results that only four new clinker production lines, with a production capacity of 5.1Mt/yr, were opened in China in the first half of 2017.
After a testing year in 2016 CRC’s turnover has picked up so far in the first-half of 2017 as its sales revenue for the period rose by 17% to US$1.67bn. Despite its cement sales volumes falling by 9% to 33.6Mt, its price increased. Given that over two thirds of its cement sales arose from Guangdong and Guangxi it seems likely that CRC suffered from the same competition issues that Anhui Conch complained about.
Graph 2: Chinese cement production by half year, 2014 – 2017. Source: National Bureau of Statistics of China.
Graph 2 adds to the picture of a resurgent local cement industry suggesting that the Chinese government’s response to the overcapacity crisis may be starting to deliver growth again. After cement production hit a high in 2014 in fell in 2015 and started to revive in 2016. So far 2017 seems to be following this trend.
Returning to the foreign ambitions of China’s cement producers brings up another story from this week with news about the Nepalese government’s decision to delay signed an investment agreement with a Chinese joint venture that is currently building a cement plant in the country. With the prime minister visiting India the local press is painting it as a face-saving move by the Nepalese to avoid antagonising either of the country’s main infrastructure partners. This is relevant because the cement industries of both China and India are starting look abroad as they consolidate and rationalise. Once China’s cement producer start building more capacity overseas than at home, conflicts with Indian producers are likely to grow and present more awkward situations for states caught in the middle.
Anhui Conch half-year sales fly following price hike
22 August 2017China: Anhui Conch’s sales revenue rose by 33% year-on-year to US$4.79bn in the first half of 2017 from US$3.60bn in the same period in 2016. Its sales volumes of cement and clinker rose by 4.6% to 134Mt. Its gross profit rose by 37% to US$1.48bn from US$1.08bn. The cement producer attributed its result to ‘significant’ increases in prices and continued discipline with production and operation costs.
By region the company reported particular increases in sales in East and Central China due to increased sales volumes and prices. In West China it increased its sales due to increasing market demand and the promotion of off-season production. South China was the company’s weakest region, with an increase of 14.3% in sales revenue, due to new production capacity.
During the reporting period Anhui Conch put seven new cement grinding plants into operation. Its Merek grinding plant in Indonesia has started operation and construction continues at plants Conch North Sulawesi in Indonesia, Battambang Conch Cement in Cambodia and Luangsprabang Conch Cement in Laos. Preliminary work for new plants in Russia, Laos and Myanmar is also in progress.
Thatta Cement grows sales in current financial year
22 August 2017Pakistan: Thatta Cement’s sales revenue rose by 34% to US$36.3m in its financial year that ended on 30 June 2017, from US$27.1m in the same period in 2016. Its profit increased by 8.7% to US$6.8m from US$6.3m.
South Africa: PPC estimates that cement demand improved in South Africa during the first half of 2017 following a poor first quarter to the calendar year. It has also predicted that production capacity utilisation rates for the industry as a whole are growing and that they could reach full capacity in 2020. On an adjusted like-for-like basis its cement sales volumes grew by 0.5% year-on-year in the most recent quarter due to good performance in its Coastal and Inland areas. However, imports have continued to decline, by 27%. Outside of South Africa the company has overseen growth particularly in Rwanda, and, in Zimbabwe, the Democratic Republic of Congo and in Ethiopia as well. The company made the announcement as part of an operational update for its first financial quarter that ended on 30 June 2017.
”Our focus is firmly on delivering improved profitability and liquidity in the shorter term while our longer term strategy remains unchanged. More specifically, we will focus our management effort on the new operations in the DRC and Ethiopia, ensuring that they deliver to expectations, while further optimising efficiency in our other businesses,” said interim chief executive officer (CEO) Johan Claassen.
Australia: Adelaide Brighton has announced a 10.9% year-on-year fall in net profit for the six months to June to US$54.4m, while revenues rose by 4.7% to US$569.2m. For the full year it expects underlying net profit to be in the range of US$148 - 157m. The company added that a surging property market and a healthy pipeline of infrastructure projects means that it is on the lookout for acquisitions in a bid to keep pace with demand and grow its market share. The company has already spent US$67.7m on bolt-on acquisitions so far in 2017.
“From a demand point of view on the east coast, it’s hard to be pessimistic,” said chief executive Martin Brydon to The Australian newspaper. Brydon said the company was pragmatic about the residential property market eventually cooling off, but any slowdown would not immediately affect the business. “Even if there was a significant drop in approvals or applications for housing, the pipeline is still there for the next 18 months,” he added.
The company also said it was likely to raise cement prices for a second time later in 2017 amid the robust conditions on the east coast, but declined to confirm the likely amount of the price rise. The price rise has been partly precipitated by strong demand but also by rising electricity prices, which remain a major preoccupation for the company. It is expected to spend an extra US$6.3m on electricity within 2017 than it budgeted for, due to unexpectedly high prices.
Cementos Argos takes a knock in the first half of 2017
15 August 2017Colombia: Cementos Argos has posted an 84.5% fall in its first half net profit in 2017 to US$19.3m. It made US$124.4m in the first half of 2016. It said that its operating revenues dropped by 3.9% year-on-year to US$1.42bn the first half of 2017, from US$1.48bn a year earlier.